MERCK & CO. INC. (MRK) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MRK - US58933Y1055 - Common Stock
108.26 USD
-0.93 (-0.85%)
108.15 USD
-0.11 (-0.1%)
Overall MRK gets a fundamental rating of 7 out of 10. We evaluated MRK against 190 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. A decent growth rate in combination with a cheap valuation! Better keep an eye on MRK. 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.
- MRK had a positive operating cash flow in the past year.
- MRK had positive earnings in each of the past 5 years.
- 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 94.74% of its industry peers.
- MRK has a better Return On Equity (36.71%) than 95.79% of its industry peers.
- MRK's Return On Invested Capital of 19.15% is amongst the best of the industry. MRK outperforms 96.32% 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
- Looking at the Profit Margin, with a value of 29.63%, MRK belongs to the top of the industry, outperforming 94.21% of the companies in the same industry.
- In the last couple of years the Profit Margin of MRK has remained more or less at the same level.
- MRK has a Operating Margin of 38.08%. This is amongst the best in the industry. MRK outperforms 96.32% of its industry peers.
- MRK's Operating Margin has improved in the last couple of years.
- With an excellent Gross Margin value of 78.72%, MRK belongs to the best of the industry, outperforming 83.68% 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
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so MRK is creating value.
- The number of shares outstanding for MRK remains at a similar level compared to 1 year ago.
- The number of shares outstanding for MRK has been reduced compared to 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 4.15. This indicates that MRK is financially healthy and has little risk of bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 4.15, MRK is in the better half of the industry, outperforming 71.05% 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 88.42% 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.
- Looking at the Debt to Equity ratio, with a value of 0.77, MRK is doing worse than 70.53% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 3.17 | ||
| Altman-Z | 4.15 |
ROIC/WACC2.1
WACC9.12%
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 68.42% of its industry peers.
- A Quick Ratio of 1.44 indicates that MRK should not have too much problems paying 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 64.74% 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.
- 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%.
- Measured over the past years, MRK shows a quite strong growth in Revenue. The Revenue has been growing by 10.40% on average per year.
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 6.65% on average per year.
- The Revenue is expected to grow by 2.64% on average over the next years.
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.
- 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
- A Price/Earnings ratio of 12.29 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.
- Compared to an average S&P500 Price/Earnings ratio of 27.30, MRK is valued rather cheaply.
- The Price/Forward Earnings ratio is 11.72, which indicates a very decent valuation of MRK.
- Based on the Price/Forward Earnings ratio, MRK is valued cheaper than 85.79% of the companies in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.04, MRK is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.29 | ||
| Fwd PE | 11.72 |
4.2 Price Multiples
- 89.47% of the companies in the same industry are more expensive than MRK, based on the Enterprise Value to EBITDA ratio.
- Based on the Price/Free Cash Flow ratio, MRK is valued cheaper than 84.74% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.59 | ||
| EV/EBITDA | 10.05 |
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)0.66
PEG (5Y)1.53
EPS Next 2Y9.96%
EPS Next 3Y10.87%
5. Dividend
5.1 Amount
- MRK has a Yearly Dividend Yield of 3.06%. 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 0.35. 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
- The dividend of MRK is nicely growing with an annual growth rate of 6.90%!
- MRK has paid a dividend for at least 10 years, which is 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%
108.26
-0.93 (-0.85%)
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 Cap268.70B
Revenue(TTM)64.23B
Net Income(TTM)19.03B
Analysts77.06
Price Target110.37 (1.95%)
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 | 12.29 | ||
| Fwd PE | 11.72 | ||
| P/S | 4.18 | ||
| P/FCF | 20.59 | ||
| P/OCF | 15.75 | ||
| P/B | 5.18 | ||
| P/tB | 17.97 | ||
| EV/EBITDA | 10.05 |
EPS(TTM)8.81
EY8.14%
EPS(NY)9.24
Fwd EY8.53%
FCF(TTM)5.26
FCFY4.86%
OCF(TTM)6.88
OCFY6.35%
SpS25.88
BVpS20.89
TBVpS6.02
PEG (NY)0.66
PEG (5Y)1.53
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 | 4.15 |
F-Score6
WACC9.12%
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%.