MERCK & CO. INC. (MRK)
US58933Y1055 - Common Stock
Overall MRK gets a fundamental rating of 7 out of 10. We evaluated MRK against 193 industry peers in the Pharmaceuticals industry. While MRK has a great profitability rating, there are some minor concerns on its financial health. MRK is valued quite cheap, while showing a decent growth score. This is a good combination! MRK also has an excellent dividend rating. This makes MRK very considerable for value and dividend investing!
1. Profitability
1.1 Basic Checks
MRK had positive earnings in the past year.
MRK had a positive operating cash flow in the past year.
MRK had positive earnings in each of the past 5 years.
MRK had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
MRK has a Return On Assets of 10.34%. This is amongst the best in the industry. MRK outperforms 93.72% of its industry peers.
MRK has a Return On Equity of 27.30%. This is amongst the best in the industry. MRK outperforms 94.76% of its industry peers.
MRK has a better Return On Invested Capital (19.49%) than 95.81% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MRK is significantly below the industry average of 43.18%.
The last Return On Invested Capital (19.49%) for MRK is above the 3 year average (12.63%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.34% | ||
| ROE | 27.3% | ||
| ROIC | 19.49% |
ROA(3y)8.66%
ROA(5y)9.07%
ROE(3y)22.24%
ROE(5y)26.52%
ROIC(3y)12.63%
ROIC(5y)12.83%
1.3 Margins
MRK has a Profit Margin of 19.23%. This is amongst the best in the industry. MRK outperforms 92.67% of its industry peers.
MRK's Profit Margin has declined in the last couple of years.
With an excellent Operating Margin value of 34.34%, MRK belongs to the best of the industry, outperforming 95.81% of the companies in the same industry.
In the last couple of years the Operating Margin of MRK has declined.
MRK's Gross Margin of 76.59% is amongst the best of the industry. MRK outperforms 83.25% of its industry peers.
In the last couple of years the Gross Margin of MRK has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 34.34% | ||
| PM (TTM) | 19.23% | ||
| GM | 76.59% |
OM growth 3Y-36.42%
OM growth 5Y-24.03%
PM growth 3Y-67.08%
PM growth 5Y-47.14%
GM growth 3Y0.65%
GM growth 5Y1.25%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so MRK is creating value.
Compared to 1 year ago, MRK has less shares outstanding
MRK has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, MRK has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.06 indicates that MRK is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 4.06, MRK is doing good in the industry, outperforming 78.01% of the companies in the same industry.
The Debt to FCF ratio of MRK is 2.57, which is a good value as it means it would take MRK, 2.57 years of fcf income to pay off all of its debts.
MRK has a better Debt to FCF ratio (2.57) than 93.72% of its industry peers.
MRK has a Debt/Equity ratio of 0.79. This is a neutral value indicating MRK is somewhat dependend on debt financing.
MRK's Debt to Equity ratio of 0.79 is on the low side compared to the rest of the industry. MRK is outperformed by 69.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.79 | ||
| Debt/FCF | 2.57 | ||
| Altman-Z | 4.06 |
ROIC/WACC2.11
WACC9.25%
2.3 Liquidity
MRK has a Current Ratio of 1.36. This is a normal value and indicates that MRK is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.36, MRK is not doing good in the industry: 77.49% of the companies in the same industry are doing better.
A Quick Ratio of 1.15 indicates that MRK should not have too much problems paying its short term obligations.
MRK has a worse Quick ratio (1.15) than 75.39% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.36 | ||
| Quick Ratio | 1.15 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 92.56% over the past year.
The earnings per share for MRK have been decreasing by -19.14% on average. This is quite bad
Looking at the last year, MRK shows a small growth in Revenue. The Revenue has grown by 6.51% in the last year.
The Revenue has been growing slightly by 7.29% on average over the past years.
EPS 1Y (TTM)92.56%
EPS 3Y-36.76%
EPS 5Y-19.14%
EPS Q2Q%-26.29%
Revenue 1Y (TTM)6.51%
Revenue growth 3Y13.13%
Revenue growth 5Y7.29%
Sales Q2Q%4.35%
3.2 Future
Based on estimates for the next years, MRK will show a very strong growth in Earnings Per Share. The EPS will grow by 50.47% on average per year.
Based on estimates for the next years, MRK will show a small growth in Revenue. The Revenue will grow by 5.14% on average per year.
EPS Next Y422.24%
EPS Next 2Y151.28%
EPS Next 3Y92.48%
EPS Next 5Y50.47%
Revenue Next Year6.73%
Revenue Next 2Y5.72%
Revenue Next 3Y5.91%
Revenue Next 5Y5.14%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 16.48, MRK is valued correctly.
Based on the Price/Earnings ratio, MRK is valued cheaply inside the industry as 84.82% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.73, MRK is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 10.35, the valuation of MRK can be described as reasonable.
MRK's Price/Forward Earnings ratio is rather cheap when compared to the industry. MRK is cheaper than 85.86% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.83. MRK is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.48 | ||
| Fwd PE | 10.35 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MRK is valued cheaper than 83.25% of the companies in the same industry.
MRK's Price/Free Cash Flow ratio is rather cheap when compared to the industry. MRK is cheaper than 85.34% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.71 | ||
| EV/EBITDA | 10.6 |
4.3 Compensation for Growth
MRK's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
MRK has an outstanding profitability rating, which may justify a higher PE ratio.
MRK's earnings are expected to grow with 92.48% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.04
PEG (5Y)N/A
EPS Next 2Y151.28%
EPS Next 3Y92.48%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.26%, MRK has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.42, MRK pays a better dividend. On top of this MRK pays more dividend than 92.67% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, MRK pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.26% |
5.2 History
On average, the dividend of MRK grows each year by 8.47%, which is quite nice.
MRK has been paying a dividend for at least 10 years, so it has a reliable track record.
MRK has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)8.47%
Div Incr Years13
Div Non Decr Years33
5.3 Sustainability
MRK pays out 63.72% of its income as dividend. This is not a sustainable payout ratio.
The dividend of MRK is growing, but earnings are growing more, so the dividend growth is sustainable.
DP63.72%
EPS Next 2Y151.28%
EPS Next 3Y92.48%
MERCK & CO. INC.
NYSE:MRK (12/20/2024, 8:25:33 PM)
After market: 98.99 +0.94 (+0.96%)98.05
-1.47 (-1.48%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners79.13%
Inst Owner Change0%
Ins Owners0.04%
Ins Owner Change0.77%
Market Cap248.03B
Analysts80
Price Target133.25 (35.9%)
Short Float %1.3%
Short Ratio2.89
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.26% |
Dividend Growth(5Y)8.47%
DP63.72%
Div Incr Years13
Div Non Decr Years33
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.07%
Min EPS beat(2)3.35%
Max EPS beat(2)4.78%
EPS beat(4)4
Avg EPS beat(4)36.16%
Min EPS beat(4)3.35%
Max EPS beat(4)127.21%
EPS beat(8)8
Avg EPS beat(8)21.03%
EPS beat(12)12
Avg EPS beat(12)18.06%
EPS beat(16)13
Avg EPS beat(16)12.99%
Revenue beat(2)2
Avg Revenue beat(2)0.46%
Min Revenue beat(2)0.2%
Max Revenue beat(2)0.71%
Revenue beat(4)3
Avg Revenue beat(4)0.9%
Min Revenue beat(4)-0.09%
Max Revenue beat(4)2.78%
Revenue beat(8)7
Avg Revenue beat(8)1.76%
Revenue beat(12)11
Avg Revenue beat(12)2.68%
Revenue beat(16)13
Avg Revenue beat(16)0.5%
PT rev (1m)-4.82%
PT rev (3m)-6.9%
EPS NQ rev (1m)0.15%
EPS NQ rev (3m)-12.15%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)-3.82%
Revenue NQ rev (1m)0.05%
Revenue NQ rev (3m)-2.73%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)-0.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.48 | ||
| Fwd PE | 10.35 | ||
| P/S | 3.93 | ||
| P/FCF | 16.71 | ||
| P/OCF | 13.58 | ||
| P/B | 5.57 | ||
| P/tB | 42.8 | ||
| EV/EBITDA | 10.6 |
EPS(TTM)5.95
EY6.07%
EPS(NY)9.47
Fwd EY9.66%
FCF(TTM)5.87
FCFY5.98%
OCF(TTM)7.22
OCFY7.36%
SpS24.97
BVpS17.59
TBVpS2.29
PEG (NY)0.04
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.34% | ||
| ROE | 27.3% | ||
| ROCE | 24.67% | ||
| ROIC | 19.49% | ||
| ROICexc | 23.37% | ||
| ROICexgc | 49.47% | ||
| OM | 34.34% | ||
| PM (TTM) | 19.23% | ||
| GM | 76.59% | ||
| FCFM | 23.49% |
ROA(3y)8.66%
ROA(5y)9.07%
ROE(3y)22.24%
ROE(5y)26.52%
ROIC(3y)12.63%
ROIC(5y)12.83%
ROICexc(3y)14.47%
ROICexc(5y)14.83%
ROICexgc(3y)34.65%
ROICexgc(5y)37.67%
ROCE(3y)15.99%
ROCE(5y)16.24%
ROICexcg growth 3Y-38.8%
ROICexcg growth 5Y-25.67%
ROICexc growth 3Y-34.34%
ROICexc growth 5Y-24.16%
OM growth 3Y-36.42%
OM growth 5Y-24.03%
PM growth 3Y-67.08%
PM growth 5Y-47.14%
GM growth 3Y0.65%
GM growth 5Y1.25%
F-Score7
Asset Turnover0.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.79 | ||
| Debt/FCF | 2.57 | ||
| Debt/EBITDA | 1.35 | ||
| Cap/Depr | 80.26% | ||
| Cap/Sales | 5.42% | ||
| Interest Coverage | 17.44 | ||
| Cash Conversion | 70.35% | ||
| Profit Quality | 122.16% | ||
| Current Ratio | 1.36 | ||
| Quick Ratio | 1.15 | ||
| Altman-Z | 4.06 |
F-Score7
WACC9.25%
ROIC/WACC2.11
Cap/Depr(3y)116.81%
Cap/Depr(5y)114.51%
Cap/Sales(3y)7.65%
Cap/Sales(5y)8.5%
Profit Quality(3y)893.42%
Profit Quality(5y)572.79%
High Growth Momentum
Growth
EPS 1Y (TTM)92.56%
EPS 3Y-36.76%
EPS 5Y-19.14%
EPS Q2Q%-26.29%
EPS Next Y422.24%
EPS Next 2Y151.28%
EPS Next 3Y92.48%
EPS Next 5Y50.47%
Revenue 1Y (TTM)6.51%
Revenue growth 3Y13.13%
Revenue growth 5Y7.29%
Sales Q2Q%4.35%
Revenue Next Year6.73%
Revenue Next 2Y5.72%
Revenue Next 3Y5.91%
Revenue Next 5Y5.14%
EBIT growth 1Y4.37%
EBIT growth 3Y-28.07%
EBIT growth 5Y-18.5%
EBIT Next Year338.01%
EBIT Next 3Y77.62%
EBIT Next 5Y44.81%
FCF growth 1Y-2.68%
FCF growth 3Y16.22%
FCF growth 5Y1.94%
OCF growth 1Y-7.27%
OCF growth 3Y8.25%
OCF growth 5Y3.55%