MERCK & CO. INC. (MRK) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MRK - US58933Y1055 - Common Stock
108.83 USD
-2.14 (-1.93%)
109.09 USD
+0.26 (+0.24%)
MRK gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 191 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 could make MRK a good candidate 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.
- Each year in the past 5 years MRK has been profitable.
- MRK had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- MRK's Return On Assets of 14.69% is amongst the best of the industry. MRK outperforms 94.76% of its industry peers.
- Looking at the Return On Equity, with a value of 36.71%, MRK belongs to the top of the industry, outperforming 95.81% of the companies in the same industry.
- MRK's Return On Invested Capital of 19.15% is amongst the best of the industry. MRK outperforms 96.34% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for MRK 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
- MRK's Profit Margin of 29.63% is amongst the best of the industry. MRK outperforms 94.24% 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 96.34% 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 83.77% 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.
- MRK has about the same amout of shares outstanding than it did 1 year ago.
- Compared to 5 years ago, MRK has less shares outstanding
- Compared to 1 year ago, MRK has an improved debt to assets ratio.
2.2 Solvency
- MRK has an Altman-Z score of 4.16. This indicates that MRK is financially healthy and has little risk of bankruptcy at the moment.
- The Altman-Z score of MRK (4.16) is better than 70.16% 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 88.48% of its industry peers.
- MRK has a Debt/Equity ratio of 0.77. This is a neutral value indicating MRK is somewhat dependend on debt financing.
- MRK has a Debt to Equity ratio of 0.77. This is in the lower half of the industry: MRK underperforms 70.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 3.17 | ||
| Altman-Z | 4.16 |
ROIC/WACC2.11
WACC9.09%
2.3 Liquidity
- A Current Ratio of 1.66 indicates that MRK should not have too much problems paying its short term obligations.
- The Current ratio of MRK (1.66) is worse than 68.06% of its industry peers.
- 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's Quick ratio of 1.44 is on the low side compared to the rest of the industry. MRK is outperformed by 64.40% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.66 | ||
| Quick Ratio | 1.44 |
3. Growth
3.1 Past
- MRK shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 48.07%, which is quite impressive.
- The Earnings Per Share has been growing by 8.04% on average over the past years. This is quite good.
- MRK shows a small growth in Revenue. In the last year, the Revenue has grown by 1.68%.
- The Revenue has been growing by 10.40% on average over the past years. This is quite good.
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
- The Earnings Per Share is expected to grow by 6.65% on average over the next years.
- Based on estimates for the next years, MRK will show a small growth in Revenue. The Revenue will grow by 2.64% on average per year.
EPS Next Y18.62%
EPS Next 2Y9.96%
EPS Next 3Y10.87%
EPS Next 5Y6.65%
Revenue Next Year1.23%
Revenue Next 2Y2.95%
Revenue Next 3Y3.69%
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.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 12.35, which indicates a correct valuation of MRK.
- Based on the Price/Earnings ratio, MRK is valued cheaply inside the industry as 87.96% of the companies are valued more expensively.
- When comparing the Price/Earnings ratio of MRK to the average of the S&P500 Index (27.38), we can say MRK is valued rather cheaply.
- Based on the Price/Forward Earnings ratio of 11.78, 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 85.34% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of MRK to the average of the S&P500 Index (24.29), we can say MRK is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.35 | ||
| Fwd PE | 11.78 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, MRK is valued cheaper than 89.53% of the companies in the same industry.
- 84.82% of the companies in the same industry are more expensive than MRK, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.7 | ||
| EV/EBITDA | 10.1 |
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.
- The excellent profitability rating of MRK may justify a higher PE ratio.
PEG (NY)0.66
PEG (5Y)1.54
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.
- Compared to an average industry Dividend Yield of 0.40, MRK pays a better dividend. On top of this MRK pays more dividend than 94.76% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.85, MRK pays a better dividend.
| 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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)6.9%
Div Incr Years14
Div Non Decr Years34
5.3 Sustainability
- MRK pays out 42.60% of its income as dividend. 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%
108.83
-2.14 (-1.93%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)10-30 2025-10-30/bmo
Earnings (Next)02-03 2026-02-03/amc
Inst Owners80.32%
Inst Owner Change-0.18%
Ins Owners0.05%
Ins Owner Change-0.55%
Market Cap270.12B
Revenue(TTM)64.23B
Net Income(TTM)19.03B
Analysts77.06
Price Target113.8 (4.57%)
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)7.18%
PT rev (3m)12.12%
EPS NQ rev (1m)-0.38%
EPS NQ rev (3m)-7%
EPS NY rev (1m)0.03%
EPS NY rev (3m)0.58%
Revenue NQ rev (1m)-0.02%
Revenue NQ rev (3m)-0.79%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.35 | ||
| Fwd PE | 11.78 | ||
| P/S | 4.21 | ||
| P/FCF | 20.7 | ||
| P/OCF | 15.83 | ||
| P/B | 5.21 | ||
| P/tB | 18.07 | ||
| EV/EBITDA | 10.1 |
EPS(TTM)8.81
EY8.1%
EPS(NY)9.24
Fwd EY8.49%
FCF(TTM)5.26
FCFY4.83%
OCF(TTM)6.88
OCFY6.32%
SpS25.88
BVpS20.89
TBVpS6.02
PEG (NY)0.66
PEG (5Y)1.54
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 | 4.16 |
F-Score6
WACC9.09%
ROIC/WACC2.11
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 Year1.23%
Revenue Next 2Y2.95%
Revenue Next 3Y3.69%
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%.