MERCK & CO. INC. (MRK) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MRK - US58933Y1055 - Common Stock
105.26 USD
-0.8 (-0.75%)
105.42 USD
+0.16 (+0.15%)
Overall MRK gets a fundamental rating of 7 out of 10. We evaluated MRK against 191 industry peers in the Pharmaceuticals industry. While MRK belongs to the best of the industry regarding profitability, 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. With these ratings, MRK could be worth investigating further 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
With an excellent Return On Assets value of 14.69%, MRK belongs to the best of the industry, outperforming 94.76% of the companies in the same industry.
MRK has a Return On Equity of 36.71%. This is amongst the best in the industry. MRK outperforms 95.81% of its industry peers.
With an excellent Return On Invested Capital value of 19.15%, MRK belongs to the best of the industry, outperforming 96.34% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for MRK is significantly above the industry average of 12.85%.
| 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
Looking at the Profit Margin, with a value of 29.63%, MRK belongs to the top of the industry, outperforming 94.24% of the companies in the same industry.
MRK's Profit Margin has been stable in the last couple of years.
With an excellent Operating Margin value of 38.08%, MRK belongs to the best of the industry, outperforming 96.34% of the companies in the same industry.
MRK's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 78.72%, MRK belongs to the top of the industry, outperforming 83.77% of the companies in the same industry.
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 | 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.
The number of shares outstanding for MRK remains at a similar level compared to 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
An Altman-Z score of 4.09 indicates that MRK is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 4.09, MRK is doing good in the industry, outperforming 71.20% of the companies in the same industry.
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.
MRK has a Debt to FCF ratio of 3.17. This is amongst the best in the industry. MRK outperforms 87.96% 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.
The Debt to Equity ratio of MRK (0.77) is worse than 70.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 3.17 | ||
| Altman-Z | 4.09 |
ROIC/WACC2.12
WACC9.02%
2.3 Liquidity
A Current Ratio of 1.66 indicates that MRK should not have too much problems paying its short term obligations.
MRK's Current ratio of 1.66 is on the low side compared to the rest of the industry. MRK is outperformed by 67.54% 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.
Looking at the Quick ratio, with a value of 1.44, MRK is doing worse than 64.40% 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.
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
Based on estimates for the next years, MRK will show a small growth in Earnings Per Share. The EPS will grow by 5.92% on average per year.
Based on estimates for the next years, MRK will show a small growth in Revenue. The Revenue will grow by 2.39% on average per year.
EPS Next Y18.62%
EPS Next 2Y9.96%
EPS Next 3Y10.87%
EPS Next 5Y5.92%
Revenue Next Year1.24%
Revenue Next 2Y3.07%
Revenue Next 3Y3.84%
Revenue Next 5Y2.39%
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 decreasing.
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
Based on the Price/Earnings ratio of 11.95, the valuation of MRK can be described as reasonable.
MRK's Price/Earnings ratio is rather cheap when compared to the industry. MRK is cheaper than 87.96% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.51, MRK is valued rather cheaply.
With a Price/Forward Earnings ratio of 11.39, the valuation of MRK can be described as very reasonable.
85.86% of the companies in the same industry are more expensive than MRK, based on the Price/Forward Earnings ratio.
MRK's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 23.13.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.95 | ||
| Fwd PE | 11.39 |
4.2 Price Multiples
89.01% of the companies in the same industry are more expensive than MRK, based on the Enterprise Value to EBITDA ratio.
MRK's Price/Free Cash Flow ratio is rather cheap when compared to the industry. MRK is cheaper than 84.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.02 | ||
| EV/EBITDA | 9.8 |
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.
PEG (NY)0.64
PEG (5Y)1.49
EPS Next 2Y9.96%
EPS Next 3Y10.87%
5. Dividend
5.1 Amount
MRK has a Yearly Dividend Yield of 3.10%. Purely for dividend investing, there may be better candidates out there.
MRK's Dividend Yield is rather good when compared to the industry average which is at 0.61. MRK pays more dividend than 95.29% of the companies in the same industry.
MRK's Dividend Yield is rather good when compared to the S&P500 average which is at 2.00.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.1% |
5.2 History
On average, the dividend of MRK grows each year by 6.90%, which is quite nice.
MRK has paid a dividend for at least 10 years, which is 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
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%
105.26
-0.8 (-0.75%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners80.3%
Inst Owner Change-0.89%
Ins Owners0.05%
Ins Owner Change-0.55%
Market Cap261.26B
Revenue(TTM)64.23B
Net Income(TTM)19.03B
Analysts76.47
Price Target110.37 (4.85%)
Short Float %1.5%
Short Ratio2.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.1% |
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)7.87%
PT rev (3m)8.57%
EPS NQ rev (1m)-0.08%
EPS NQ rev (3m)-6.86%
EPS NY rev (1m)0.35%
EPS NY rev (3m)0.58%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)-0.78%
Revenue NY rev (1m)0.16%
Revenue NY rev (3m)0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.95 | ||
| Fwd PE | 11.39 | ||
| P/S | 4.07 | ||
| P/FCF | 20.02 | ||
| P/OCF | 15.31 | ||
| P/B | 5.04 | ||
| P/tB | 17.48 | ||
| EV/EBITDA | 9.8 |
EPS(TTM)8.81
EY8.37%
EPS(NY)9.24
Fwd EY8.78%
FCF(TTM)5.26
FCFY4.99%
OCF(TTM)6.88
OCFY6.53%
SpS25.88
BVpS20.89
TBVpS6.02
PEG (NY)0.64
PEG (5Y)1.49
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 | 4.09 |
F-Score6
WACC9.02%
ROIC/WACC2.12
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 5Y5.92%
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 5Y2.39%
EBIT growth 1Y2.78%
EBIT growth 3Y15.93%
EBIT growth 5Y19.23%
EBIT Next Year28.15%
EBIT Next 3Y13.73%
EBIT Next 5Y8.95%
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 9 / 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%.