MERCK & CO. INC. (MRK) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MRK - US58933Y1055 - Common Stock
110.97 USD
-0.04 (-0.04%)
110.81 USD
-0.16 (-0.14%)
MRK gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 190 industry peers in the Pharmaceuticals industry. MRK has an excellent profitability rating, but there are some minor concerns on its financial health. MRK may be a bit undervalued, certainly considering the very reasonable score on growth Finally MRK also has an excellent dividend rating. This makes MRK very considerable for value and dividend investing!
1. Profitability
1.1 Basic Checks
- In the past year MRK was profitable.
- In the past year MRK had a positive cash flow from operations.
- In the past 5 years MRK has always been profitable.
- In the past 5 years MRK always reported a positive cash flow from operatings.
1.2 Ratios
- MRK's Return On Assets of 14.69% is amongst the best of the industry. MRK outperforms 94.74% of its industry peers.
- The Return On Equity of MRK (36.71%) is better than 95.79% of its industry peers.
- MRK has a Return On Invested Capital of 19.15%. This is amongst the best in the industry. MRK outperforms 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's Profit Margin of 29.63% is amongst the best of the industry. MRK outperforms 94.21% of its industry peers.
- In the last couple of years the Profit Margin of MRK has remained more or less at the same level.
- 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's Gross Margin of 78.72% is amongst the best of the industry. MRK outperforms 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
- 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 about the same amount of shares outstanding.
- MRK has less shares outstanding than it did 5 years ago.
- The debt/assets ratio for MRK has been reduced compared to a year ago.
2.2 Solvency
- MRK has an Altman-Z score of 4.20. This indicates that MRK is financially healthy and has little risk of bankruptcy at the moment.
- MRK's Altman-Z score of 4.20 is fine compared to the rest of the industry. MRK outperforms 70.00% of its industry peers.
- The Debt to FCF ratio of MRK is 3.17, which is a good value as it means it would take MRK, 3.17 years of fcf income to pay off all of its debts.
- With an excellent Debt to FCF ratio value of 3.17, MRK belongs to the best 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.
- MRK has a worse Debt to Equity ratio (0.77) than 70.53% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 3.17 | ||
| Altman-Z | 4.2 |
ROIC/WACC2.11
WACC9.08%
2.3 Liquidity
- A Current Ratio of 1.66 indicates that MRK should not have too much problems paying 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.
- 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.
- Looking at the Quick ratio, with a value of 1.44, MRK is doing worse than 64.74% of the companies in the same industry.
| 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.
- 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.
- 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
- MRK is valuated correctly with a Price/Earnings ratio of 12.60.
- MRK's Price/Earnings ratio is rather cheap when compared to the industry. MRK is cheaper than 87.89% of the companies in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 27.54, MRK is valued rather cheaply.
- MRK is valuated correctly with a Price/Forward Earnings ratio of 12.01.
- 85.26% of the companies in the same industry are more expensive than MRK, based on the Price/Forward Earnings ratio.
- The average S&P500 Price/Forward Earnings ratio is at 24.31. MRK is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.6 | ||
| Fwd PE | 12.01 |
4.2 Price Multiples
- MRK's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. MRK is cheaper than 89.47% 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 84.74% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.11 | ||
| EV/EBITDA | 10.29 |
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.
- The excellent profitability rating of MRK may justify a higher PE ratio.
PEG (NY)0.68
PEG (5Y)1.57
EPS Next 2Y9.96%
EPS Next 3Y10.87%
5. Dividend
5.1 Amount
- MRK has a Yearly Dividend Yield of 3.06%.
- MRK's Dividend Yield is rather good when compared to the industry average which is at 0.35. MRK pays more dividend than 95.26% 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 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%
110.97
-0.04 (-0.04%)
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 Cap275.43B
Revenue(TTM)64.23B
Net Income(TTM)19.03B
Analysts77.06
Price Target110.37 (-0.54%)
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 | 12.6 | ||
| Fwd PE | 12.01 | ||
| P/S | 4.29 | ||
| P/FCF | 21.11 | ||
| P/OCF | 16.14 | ||
| P/B | 5.31 | ||
| P/tB | 18.42 | ||
| EV/EBITDA | 10.29 |
EPS(TTM)8.81
EY7.94%
EPS(NY)9.24
Fwd EY8.32%
FCF(TTM)5.26
FCFY4.74%
OCF(TTM)6.88
OCFY6.2%
SpS25.88
BVpS20.89
TBVpS6.02
PEG (NY)0.68
PEG (5Y)1.57
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
WACC9.08%
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 Year1.24%
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%.