MERCK & CO. INC. (MRK) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MRK - US58933Y1055 - Common Stock
110.53 USD
-0.46 (-0.41%)
110.54 USD
+0.01 (+0.01%)
Overall MRK gets a fundamental rating of 7 out of 10. We evaluated MRK against 190 industry peers in the Pharmaceuticals industry. While MRK has a great profitability rating, there are some minor concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on MRK. Finally MRK also has an excellent dividend rating. These ratings would make MRK suitable for value and dividend investing!
1. Profitability
1.1 Basic Checks
In the past year MRK was profitable.
MRK had a positive operating cash flow in the past year.
In the past 5 years MRK has always been profitable.
Each year in the past 5 years MRK had a positive operating cash flow.
1.2 Ratios
MRK has a better Return On Assets (14.69%) than 94.79% of its industry peers.
MRK's Return On Equity of 36.71% is amongst the best of the industry. MRK outperforms 95.83% of its industry peers.
Looking at the Return On Invested Capital, with a value of 19.15%, MRK belongs to the top of the industry, outperforming 96.35% of the companies in the same industry.
MRK had an Average Return On Invested Capital over the past 3 years of 20.39%. This is significantly above the industry average of 12.84%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.69% | ||
| ROE | 36.71% | ||
| ROIC | 19.15% |
ROA(3y)9.42%
ROA(5y)9.66%
ROE(3y)23.17%
ROE(5y)26.32%
ROIC(3y)20.39%
ROIC(5y)17.93%
1.3 Margins
The Profit Margin of MRK (29.63%) is better than 94.27% of its industry peers.
In the last couple of years the Profit Margin of MRK has remained more or less at the same level.
MRK has a better Operating Margin (38.08%) than 96.35% of its industry peers.
In the last couple of years the Operating Margin of MRK has grown nicely.
MRK's Gross Margin of 78.72% is amongst the best of the industry. MRK outperforms 83.85% of its industry peers.
MRK's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 38.08% | ||
| PM (TTM) | 29.63% | ||
| GM | 78.72% |
OM growth 3Y5.75%
OM growth 5Y7.99%
PM growth 3Y-0.15%
PM growth 5Y1.18%
GM growth 3Y1.92%
GM growth 5Y1.45%
2. Health
2.1 Basic Checks
MRK has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, MRK has about the same amount of shares outstanding.
Compared to 5 years ago, MRK has less shares outstanding
The debt/assets ratio for MRK has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 4.19 indicates that MRK is not in any danger for bankruptcy at the moment.
MRK has a Altman-Z score of 4.19. This is in the better half of the industry: MRK outperforms 70.83% of its industry peers.
MRK has a debt to FCF ratio of 3.17. This is a good value and a sign of high solvency as MRK would need 3.17 years to pay back of all of its debts.
MRK has a Debt to FCF ratio of 3.17. This is amongst the best in the industry. MRK outperforms 88.54% of its industry peers.
A Debt/Equity ratio of 0.77 indicates that MRK is somewhat dependend on debt financing.
MRK has a worse Debt to Equity ratio (0.77) than 70.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 3.17 | ||
| Altman-Z | 4.19 |
ROIC/WACC2.09
WACC9.16%
2.3 Liquidity
MRK has a Current Ratio of 1.66. This is a normal value and indicates that MRK is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.66, MRK is doing worse than 67.71% of the companies in the same industry.
MRK has a Quick Ratio of 1.44. This is a normal value and indicates that MRK is financially healthy and should not expect problems in meeting its short term obligations.
MRK has a worse Quick ratio (1.44) than 64.06% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.66 | ||
| Quick Ratio | 1.44 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 48.07% over the past year.
The Earnings Per Share has been growing by 8.04% on average over the past years. This is quite good.
The Revenue has been growing slightly by 1.68% in the past year.
MRK shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.40% yearly.
EPS 1Y (TTM)48.07%
EPS 3Y6.87%
EPS 5Y8.04%
EPS Q2Q%70.7%
Revenue 1Y (TTM)1.68%
Revenue growth 3Y9.63%
Revenue growth 5Y10.4%
Sales Q2Q%3.72%
3.2 Future
MRK is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.65% yearly.
MRK is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.64% yearly.
EPS Next Y18.62%
EPS Next 2Y9.96%
EPS Next 3Y10.87%
EPS Next 5Y6.65%
Revenue Next Year1.24%
Revenue Next 2Y3.07%
Revenue Next 3Y3.84%
Revenue Next 5Y2.64%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
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
The Price/Earnings ratio is 12.55, which indicates a correct valuation of MRK.
Based on the Price/Earnings ratio, MRK is valued cheaper than 88.02% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.19. MRK is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 11.97, which indicates a very decent valuation of MRK.
Based on the Price/Forward Earnings ratio, MRK is valued cheaper than 85.94% of the companies in the same industry.
MRK is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.92, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.55 | ||
| Fwd PE | 11.97 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MRK is valued cheaper than 89.58% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MRK indicates a rather cheap valuation: MRK is cheaper than 84.90% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.02 | ||
| EV/EBITDA | 10.25 |
4.3 Compensation for Growth
The 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.
PEG (NY)0.67
PEG (5Y)1.56
EPS Next 2Y9.96%
EPS Next 3Y10.87%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.06%, MRK has a reasonable but not impressive dividend return.
MRK's Dividend Yield is rather good when compared to the industry average which is at 0.35. MRK pays more dividend than 95.31% of the companies in the same industry.
MRK's Dividend Yield is rather good when compared to the S&P500 average which is at 1.92.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.06% |
5.2 History
On average, the dividend of MRK grows each year by 6.90%, 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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.9%
Div Incr Years14
Div Non Decr Years34
5.3 Sustainability
42.60% of the earnings are spent on dividend by MRK. This is a bit on the high side, but may be sustainable.
The dividend of MRK is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP42.6%
EPS Next 2Y9.96%
EPS Next 3Y10.87%
110.53
-0.46 (-0.41%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners80.32%
Inst Owner Change-0.25%
Ins Owners0.05%
Ins Owner Change-0.55%
Market Cap274.34B
Revenue(TTM)64.23B
Net Income(TTM)19.03B
Analysts77.06
Price Target110.37 (-0.14%)
Short Float %1.5%
Short Ratio2.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.06% |
Yearly Dividend3.1
Dividend Growth(5Y)6.9%
DP42.6%
Div Incr Years14
Div Non Decr Years34
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.37%
Min EPS beat(2)7.69%
Max EPS beat(2)13.06%
EPS beat(4)4
Avg EPS beat(4)7.28%
Min EPS beat(4)2.93%
Max EPS beat(4)13.06%
EPS beat(8)8
Avg EPS beat(8)21.72%
EPS beat(12)12
Avg EPS beat(12)16.45%
EPS beat(16)16
Avg EPS beat(16)15.36%
Revenue beat(2)1
Avg Revenue beat(2)-0.35%
Min Revenue beat(2)-1.54%
Max Revenue beat(2)0.83%
Revenue beat(4)2
Avg Revenue beat(4)-0.09%
Min Revenue beat(4)-1.54%
Max Revenue beat(4)0.83%
Revenue beat(8)5
Avg Revenue beat(8)0.41%
Revenue beat(12)9
Avg Revenue beat(12)1.14%
Revenue beat(16)13
Avg Revenue beat(16)1.98%
PT rev (1m)3.95%
PT rev (3m)8.74%
EPS NQ rev (1m)0.18%
EPS NQ rev (3m)-6.86%
EPS NY rev (1m)0.03%
EPS NY rev (3m)0.58%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)-0.78%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.55 | ||
| Fwd PE | 11.97 | ||
| P/S | 4.27 | ||
| P/FCF | 21.02 | ||
| P/OCF | 16.08 | ||
| P/B | 5.29 | ||
| P/tB | 18.35 | ||
| EV/EBITDA | 10.25 |
EPS(TTM)8.81
EY7.97%
EPS(NY)9.24
Fwd EY8.36%
FCF(TTM)5.26
FCFY4.76%
OCF(TTM)6.88
OCFY6.22%
SpS25.88
BVpS20.89
TBVpS6.02
PEG (NY)0.67
PEG (5Y)1.56
Graham Number64.35
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.69% | ||
| ROE | 36.71% | ||
| ROCE | 24.24% | ||
| ROIC | 19.15% | ||
| ROICexc | 23.36% | ||
| ROICexgc | 42.18% | ||
| OM | 38.08% | ||
| PM (TTM) | 29.63% | ||
| GM | 78.72% | ||
| FCFM | 20.31% |
ROA(3y)9.42%
ROA(5y)9.66%
ROE(3y)23.17%
ROE(5y)26.32%
ROIC(3y)20.39%
ROIC(5y)17.93%
ROICexc(3y)23.53%
ROICexc(5y)20.53%
ROICexgc(3y)51.05%
ROICexgc(5y)47.06%
ROCE(3y)25.81%
ROCE(5y)22.7%
ROICexgc growth 3Y7.57%
ROICexgc growth 5Y3.37%
ROICexc growth 3Y15.27%
ROICexc growth 5Y10.69%
OM growth 3Y5.75%
OM growth 5Y7.99%
PM growth 3Y-0.15%
PM growth 5Y1.18%
GM growth 3Y1.92%
GM growth 5Y1.45%
F-Score6
Asset Turnover0.5
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 3.17 | ||
| Debt/EBITDA | 1.38 | ||
| Cap/Depr | 87.9% | ||
| Cap/Sales | 6.25% | ||
| Interest Coverage | 18.43 | ||
| Cash Conversion | 58.79% | ||
| Profit Quality | 68.56% | ||
| Current Ratio | 1.66 | ||
| Quick Ratio | 1.44 | ||
| Altman-Z | 4.19 |
F-Score6
WACC9.16%
ROIC/WACC2.09
Cap/Depr(3y)95.66%
Cap/Depr(5y)110.48%
Cap/Sales(3y)6.36%
Cap/Sales(5y)7.78%
Profit Quality(3y)903.98%
Profit Quality(5y)573.68%
High Growth Momentum
Growth
EPS 1Y (TTM)48.07%
EPS 3Y6.87%
EPS 5Y8.04%
EPS Q2Q%70.7%
EPS Next Y18.62%
EPS Next 2Y9.96%
EPS Next 3Y10.87%
EPS Next 5Y6.65%
Revenue 1Y (TTM)1.68%
Revenue growth 3Y9.63%
Revenue growth 5Y10.4%
Sales Q2Q%3.72%
Revenue Next Year1.24%
Revenue Next 2Y3.07%
Revenue Next 3Y3.84%
Revenue Next 5Y2.64%
EBIT growth 1Y2.78%
EBIT growth 3Y15.93%
EBIT growth 5Y19.23%
EBIT Next Year28.15%
EBIT Next 3Y13.73%
EBIT Next 5Y11.96%
FCF growth 1Y-0.9%
FCF growth 3Y23.27%
FCF growth 5Y12.67%
OCF growth 1Y-0.73%
OCF growth 3Y15.02%
OCF growth 5Y9.82%
MERCK & CO. INC. / MRK FAQ
What is the fundamental rating for MRK stock?
ChartMill assigns a fundamental rating of 7 / 10 to MRK.
Can you provide the valuation status for MERCK & CO. INC.?
ChartMill assigns a valuation rating of 8 / 10 to MERCK & CO. INC. (MRK). This can be considered as Undervalued.
Can you provide the profitability details for MERCK & CO. INC.?
MERCK & CO. INC. (MRK) has a profitability rating of 9 / 10.
What is the financial health of MERCK & CO. INC. (MRK) stock?
The financial health rating of MERCK & CO. INC. (MRK) is 6 / 10.
How sustainable is the dividend of MERCK & CO. INC. (MRK) stock?
The dividend rating of MERCK & CO. INC. (MRK) is 7 / 10 and the dividend payout ratio is 42.6%.