News Image

When you look at NYSE:MRK, it's hard to ignore the strong fundamentals, especially considering its likely undervaluation.

By Mill Chart

Last update: Apr 11, 2024

Consider MERCK & CO. INC. (NYSE:MRK) as a top value stock, identified by our stock screening tool. NYSE:MRK shines in terms of profitability, solvency, and liquidity, all while remaining very reasonably priced. Let's dive deeper into the analysis.

Evaluating Valuation: NYSE:MRK

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NYSE:MRK boasts a 7 out of 10:

  • Compared to the rest of the industry, the Price/Earnings ratio of MRK indicates a rather cheap valuation: MRK is cheaper than 80.90% of the companies listed in the same industry.
  • Based on the Price/Forward Earnings ratio, MRK is valued cheaper than 84.42% of the companies in the same industry.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 22.17, MRK is valued a bit cheaper.
  • MRK's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. MRK is cheaper than 77.39% of the companies in the same industry.
  • Based on the Price/Free Cash Flow ratio, MRK is valued cheaply inside the industry as 80.40% of the companies are valued more expensively.
  • 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.
  • A more expensive valuation may be justified as MRK's earnings are expected to grow with 93.43% in the coming years.

How do we evaluate the Profitability for NYSE:MRK?

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:MRK, the assigned 8 is noteworthy for profitability:

  • With an excellent Return On Assets value of 0.34%, MRK belongs to the best of the industry, outperforming 83.42% of the companies in the same industry.
  • With an excellent Return On Equity value of 0.97%, MRK belongs to the best of the industry, outperforming 84.42% of the companies in the same industry.
  • MRK's Return On Invested Capital of 3.97% is amongst the best of the industry. MRK outperforms 82.41% of its industry peers.
  • The last Return On Invested Capital (3.97%) for MRK is well below the 3 year average (12.63%), which needs to be investigated, but indicates that MRK had better years and this may not be a problem.
  • MRK's Profit Margin of 0.61% is amongst the best of the industry. MRK outperforms 83.42% of its industry peers.
  • With an excellent Operating Margin value of 6.76%, MRK belongs to the best of the industry, outperforming 80.90% of the companies in the same industry.
  • With an excellent Gross Margin value of 73.53%, MRK belongs to the best of the industry, outperforming 80.40% of the companies in the same industry.

Assessing Health for NYSE:MRK

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:MRK has earned a 7 out of 10:

  • MRK has an Altman-Z score of 4.26. This indicates that MRK is financially healthy and has little risk of bankruptcy at the moment.
  • MRK has a better Altman-Z score (4.26) than 80.40% of its industry peers.
  • The Debt to FCF ratio of MRK is 3.83, which is a good value as it means it would take MRK, 3.83 years of fcf income to pay off all of its debts.
  • Looking at the Debt to FCF ratio, with a value of 3.83, MRK belongs to the top of the industry, outperforming 88.94% of the companies in the same industry.
  • MRK does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Growth Assessment of NYSE:MRK

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NYSE:MRK scores a 4 out of 10:

  • The Earnings Per Share is expected to grow by 50.72% on average over the next years. This is a very strong growth
  • When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

For an up to date full fundamental analysis you can check the fundamental report of MRK

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.

Back

MERCK & CO. INC.

NYSE:MRK (5/24/2024, 7:04:00 PM)

After market: 129.44 -0.05 (-0.04%)

129.49

-1.6 (-1.22%)

MRK News

News Image2 days ago - Investor's Business DailyS&P 500 Plays And One Dow Jones Giant Lead Five Stocks Near Buy Points

These five names are showing relative strength.

News Image2 days ago - USA News GroupEmerging Trends in Oncology: ASCO 2024 Highlights Next-Gen Antibody-Drug Conjugates and More

/PRNewswire/ -- USA News Group News Commentary – As the 2024 American Society of Clinical Oncology (ASCO) annual meeting approaches, excitement builds over the...

News Image2 days ago - Investor's Business DailyWhy Top 4% Biotech Stock, Merus, Just Catapulted To A Record High

The company passed investors' bar for success in a study of a head-and-neck cancer treatment.

News Image3 days ago - The Motley FoolBillionaire Ken Griffin Is Buying These Dividend Stocks Hand Over Fist. Should You?

The billionaire hedge fund manager doesn't need dividend income. But he'll get more of it after his Q1 purchases.

News Image3 days ago - InvestorPlaceBargain Bin: 3 Cheap Stocks to Buy Before Memorial Day

Summer has arrived on Wall Street! Discover three cheap stocks to buy with solid fundamentals to boost your profitability this season.

News Image4 days ago - ChartmillMERCK & CO. INC. (NYSE:MRK) Reveals Intriguing Technical Aspects. Here's What You Need to Know.

Exploring MERCK & CO. INC.'s Technical Signals and Breakout Potential.

News Image10 days ago - InvestorPlaceStorm Shelter: 7 Safe Haven Stocks to Batten Down the Hatches

With the market potentially posing some challenges, investors may find comfort in considering these safe haven stocks to buy.

News Image12 days ago - Merck & Co., Inc.Merck to Present New Data at 2024 ASCO Annual Meeting Demonstrating Advancements in Novel Oncology Treatment Approaches Across Broad Portfolio and Diverse Pipeline
News Image13 days ago - Market News VideoSee Which Of The Latest 13F Filers Holds Merck & Co
News Image13 days ago - Market News VideoDow Movers: MRK, INTC
News Image17 days ago - ChartmillBased on good technical signals, MERCK & CO. INC. is potentially setting up for a breakout.

Based on good technical signals, MERCK & CO. INC. is potentially setting up for a breakout.

News Image21 days ago - ChartmillIn a market where value is scarce, NYSE:MRK offers a refreshing opportunity with its solid fundamentals.

MERCK & CO. INC. (NYSE:MRK) stands out as a stock that provides good value for the fundamentals it showcases.

MRK Links
Follow us for more