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%)
We assign a fundamental rating of 7 out of 10 to MRK. MRK was compared to 190 industry peers in the Pharmaceuticals industry. MRK scores excellent on profitability, but 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! Finally MRK also has an excellent dividend rating. With these ratings, MRK could be worth investigating further for value and dividend investing!.
1. Profitability
1.1 Basic Checks
- MRK had positive earnings in the past year.
- In the past year MRK had a positive cash flow from operations.
- In the past 5 years MRK has always been profitable.
- MRK had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- With an excellent Return On Assets value of 14.69%, MRK belongs to the best of the industry, outperforming 94.74% of the companies in the same industry.
- MRK's Return On Equity of 36.71% is amongst the best of the industry. MRK outperforms 95.79% of its industry peers.
- The Return On Invested Capital of MRK (19.15%) is better than 96.32% of its industry peers.
- The Average Return On Invested Capital over the past 3 years 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 has a better Profit Margin (29.63%) than 94.21% of its industry peers.
- MRK's Profit Margin has been stable in the last couple of years.
- The Operating Margin of MRK (38.08%) is better than 96.32% of its industry peers.
- In the last couple of years the Operating Margin of MRK has grown nicely.
- MRK has a better Gross Margin (78.72%) than 83.68% 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
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), MRK is creating value.
- MRK has about the same amout of shares outstanding than it did 1 year ago.
- The number of shares outstanding for MRK has been reduced compared to 5 years ago.
- MRK has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 4.20 indicates that MRK is not in any danger for bankruptcy at the moment.
- MRK has a Altman-Z score of 4.20. This is in the better half of the industry: MRK outperforms 70.00% 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.
- Looking at the Debt to FCF ratio, with a value of 3.17, MRK belongs to the top of the industry, outperforming 88.42% of the companies in the same industry.
- MRK has a Debt/Equity ratio of 0.77. This is a neutral value indicating MRK is somewhat dependend on debt financing.
- With a Debt to Equity ratio value of 0.77, MRK is not doing good in the industry: 70.53% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 3.17 | ||
| Altman-Z | 4.2 |
ROIC/WACC2.1
WACC9.13%
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.
- With a Current ratio value of 1.66, MRK is not doing good in the industry: 68.42% of the companies in the same industry are doing better.
- A Quick Ratio of 1.44 indicates that MRK should not have too much problems paying its short term obligations.
- The Quick ratio of MRK (1.44) is worse than 64.74% 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.
- MRK shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.04% yearly.
- 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
- 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 Year1.24%
Revenue Next 2Y3.07%
Revenue Next 3Y3.84%
Revenue Next 5Y2.64%
3.3 Evolution
- The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
- 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
- A Price/Earnings ratio of 12.35 indicates a correct valuation of MRK.
- 87.89% of the companies in the same industry are more expensive than MRK, based on the Price/Earnings ratio.
- The average S&P500 Price/Earnings ratio is at 27.47. MRK is valued rather cheaply when compared to this.
- MRK is valuated reasonably with a Price/Forward Earnings ratio of 11.78.
- Based on the Price/Forward Earnings ratio, MRK is valued cheaply inside the industry as 85.26% of the companies are valued more expensively.
- The average S&P500 Price/Forward Earnings ratio is at 24.26. MRK is valued rather cheaply when compared to this.
| 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 cheaply inside the industry as 89.47% of the companies are valued more expensively.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of MRK indicates a rather cheap valuation: MRK is cheaper than 84.74% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.7 | ||
| EV/EBITDA | 10.29 |
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
- MRK has a Yearly Dividend Yield of 3.06%.
- Compared to an average industry Dividend Yield of 0.35, MRK pays a better dividend. On top of this MRK pays more dividend than 95.26% of the companies listed in the same industry.
- MRK's Dividend Yield is rather good when compared to the S&P500 average which is at 1.89.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.06% |
5.2 History
- The dividend of MRK is nicely growing with an annual growth rate of 6.90%!
- 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
- 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%
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-0.25%
Ins Owners0.05%
Ins Owner Change-0.55%
Market Cap270.12B
Revenue(TTM)64.23B
Net Income(TTM)19.03B
Analysts77.06
Price Target110.37 (1.42%)
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 | 12.35 | ||
| 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 | 10.29 |
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 | 4.2 |
F-Score6
WACC9.13%
ROIC/WACC2.1
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%.