MERCK KGAA (1MRK.MI) Stock Fundamental Analysis
BIT:1MRK - Euronext Milan - DE0006599905 - Common Stock - Currency: EUR
1MRK gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 53 industry peers in the Pharmaceuticals industry. Both the profitability and the financial health of 1MRK get a neutral evaluation. Nothing too spectacular is happening here. 1MRK is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year 1MRK was profitable.
In the past year 1MRK had a positive cash flow from operations.
Each year in the past 5 years 1MRK has been profitable.
Each year in the past 5 years 1MRK had a positive operating cash flow.
1.2 Ratios
1MRK has a Return On Assets (5.38%) which is in line with its industry peers.
1MRK has a Return On Equity (9.28%) which is comparable to the rest of the industry.
1MRK has a Return On Invested Capital of 7.26%. This is comparable to the rest of the industry: 1MRK outperforms 54.90% of its industry peers.
1MRK had an Average Return On Invested Capital over the past 3 years of 9.28%. This is significantly below the industry average of 15.44%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.38% | ||
| ROE | 9.28% | ||
| ROIC | 7.26% |
ROA(3y)6.02%
ROA(5y)5.91%
ROE(3y)10.9%
ROE(5y)11.75%
ROIC(3y)9.28%
ROIC(5y)9.07%
1.3 Margins
The Profit Margin of 1MRK (13.12%) is better than 70.59% of its industry peers.
In the last couple of years the Profit Margin of 1MRK has grown nicely.
1MRK has a Operating Margin (17.26%) which is in line with its industry peers.
In the last couple of years the Operating Margin of 1MRK has grown nicely.
Looking at the Gross Margin, with a value of 59.01%, 1MRK is doing worse than 64.71% of the companies in the same industry.
In the last couple of years the Gross Margin of 1MRK has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.26% | ||
| PM (TTM) | 13.12% | ||
| GM | 59.01% |
OM growth 3Y-2.38%
OM growth 5Y5.83%
PM growth 3Y-5.43%
PM growth 5Y9.94%
GM growth 3Y-1.81%
GM growth 5Y-1.2%
2. Health
2.1 Basic Checks
1MRK has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
1MRK has about the same amout of shares outstanding than it did 1 year ago.
1MRK has about the same amout of shares outstanding than it did 5 years ago.
Compared to 1 year ago, 1MRK has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.91 indicates that 1MRK is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of 1MRK (2.91) is comparable to the rest of the industry.
1MRK has a debt to FCF ratio of 4.28. This is a neutral value as 1MRK would need 4.28 years to pay back of all of its debts.
The Debt to FCF ratio of 1MRK (4.28) is better than 60.78% of its industry peers.
A Debt/Equity ratio of 0.23 indicates that 1MRK is not too dependend on debt financing.
The Debt to Equity ratio of 1MRK (0.23) is better than 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 4.28 | ||
| Altman-Z | 2.91 |
ROIC/WACC1.06
WACC6.83%
2.3 Liquidity
A Current Ratio of 1.19 indicates that 1MRK should not have too much problems paying its short term obligations.
The Current ratio of 1MRK (1.19) is worse than 66.67% of its industry peers.
A Quick Ratio of 0.79 indicates that 1MRK may have some problems paying its short term obligations.
With a Quick ratio value of 0.79, 1MRK is not doing good in the industry: 64.71% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.19 | ||
| Quick Ratio | 0.79 |
3. Growth
3.1 Past
1MRK shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 1.77%.
The Earnings Per Share has been growing by 9.19% on average over the past years. This is quite good.
Looking at the last year, 1MRK shows a small growth in Revenue. The Revenue has grown by 0.78% in the last year.
The Revenue has been growing slightly by 5.55% on average over the past years.
EPS 1Y (TTM)1.77%
EPS 3Y-0.35%
EPS 5Y9.19%
EPS Q2Q%11.89%
Revenue 1Y (TTM)0.78%
Revenue growth 3Y2.43%
Revenue growth 5Y5.55%
Sales Q2Q%3.7%
3.2 Future
Based on estimates for the next years, 1MRK will show a small growth in Earnings Per Share. The EPS will grow by 7.50% on average per year.
The Revenue is expected to grow by 4.14% on average over the next years.
EPS Next Y8.35%
EPS Next 2Y8.91%
EPS Next 3Y7.86%
EPS Next 5Y7.5%
Revenue Next Year4.01%
Revenue Next 2Y4%
Revenue Next 3Y3.79%
Revenue Next 5Y4.14%
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 13.70 indicates a correct valuation of 1MRK.
1MRK's Price/Earnings ratio is a bit cheaper when compared to the industry. 1MRK is cheaper than 74.51% of the companies in the same industry.
1MRK is valuated rather cheaply when we compare the Price/Earnings ratio to 26.19, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 12.64, which indicates a correct valuation of 1MRK.
70.59% of the companies in the same industry are more expensive than 1MRK, based on the Price/Forward Earnings ratio.
1MRK's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.13.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.7 | ||
| Fwd PE | 12.64 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, 1MRK is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
62.75% of the companies in the same industry are more expensive than 1MRK, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.4 | ||
| EV/EBITDA | 10 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.64
PEG (5Y)1.49
EPS Next 2Y8.91%
EPS Next 3Y7.86%
5. Dividend
5.1 Amount
1MRK has a Yearly Dividend Yield of 1.80%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.05, 1MRK has a dividend in line with its industry peers.
Compared to the average S&P500 Dividend Yield of 2.40, 1MRK is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.8% |
5.2 History
The dividend of 1MRK is nicely growing with an annual growth rate of 11.88%!
Dividend Growth(5Y)11.88%
Div Incr YearsN/A
Div Non Decr YearsN/A
5.3 Sustainability
10.23% of the earnings are spent on dividend by 1MRK. This is a low number and sustainable payout ratio.
1MRK's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP10.23%
EPS Next 2Y8.91%
EPS Next 3Y7.86%
BIT:1MRK (4/22/2025, 7:00:00 PM)
118.2
+0.2 (+0.17%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners54.58%
Inst Owner ChangeN/A
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap51.39B
Analysts80
Price Target174.24 (47.41%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.8% |
Yearly Dividend0.65
Dividend Growth(5Y)11.88%
DP10.23%
Div Incr YearsN/A
Div Non Decr YearsN/A
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.48%
Min EPS beat(2)-2.56%
Max EPS beat(2)-0.39%
EPS beat(4)2
Avg EPS beat(4)4.19%
Min EPS beat(4)-2.56%
Max EPS beat(4)10.63%
EPS beat(8)3
Avg EPS beat(8)1.62%
EPS beat(12)6
Avg EPS beat(12)0.89%
EPS beat(16)8
Avg EPS beat(16)2.24%
Revenue beat(2)0
Avg Revenue beat(2)-1.39%
Min Revenue beat(2)-2.1%
Max Revenue beat(2)-0.68%
Revenue beat(4)1
Avg Revenue beat(4)-0.88%
Min Revenue beat(4)-2.1%
Max Revenue beat(4)0.28%
Revenue beat(8)1
Avg Revenue beat(8)-1.3%
Revenue beat(12)3
Avg Revenue beat(12)-0.96%
Revenue beat(16)5
Avg Revenue beat(16)-0.72%
PT rev (1m)-3.18%
PT rev (3m)-6.1%
EPS NQ rev (1m)-1.9%
EPS NQ rev (3m)-2.79%
EPS NY rev (1m)-0.92%
EPS NY rev (3m)-5.48%
Revenue NQ rev (1m)-7.67%
Revenue NQ rev (3m)-7.57%
Revenue NY rev (1m)-0.76%
Revenue NY rev (3m)-0.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.7 | ||
| Fwd PE | 12.64 | ||
| P/S | 2.43 | ||
| P/FCF | 21.4 | ||
| P/OCF | 11.21 | ||
| P/B | 1.72 | ||
| P/tB | 11.47 | ||
| EV/EBITDA | 10 |
EPS(TTM)8.63
EY7.3%
EPS(NY)9.35
Fwd EY7.91%
FCF(TTM)5.52
FCFY4.67%
OCF(TTM)10.55
OCFY8.92%
SpS48.66
BVpS68.8
TBVpS10.3
PEG (NY)1.64
PEG (5Y)1.49
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.38% | ||
| ROE | 9.28% | ||
| ROCE | 9.07% | ||
| ROIC | 7.26% | ||
| ROICexc | 7.88% | ||
| ROICexgc | 25.03% | ||
| OM | 17.26% | ||
| PM (TTM) | 13.12% | ||
| GM | 59.01% | ||
| FCFM | 11.35% |
ROA(3y)6.02%
ROA(5y)5.91%
ROE(3y)10.9%
ROE(5y)11.75%
ROIC(3y)9.28%
ROIC(5y)9.07%
ROICexc(3y)9.79%
ROICexc(5y)9.49%
ROICexgc(3y)29.91%
ROICexgc(5y)31.66%
ROCE(3y)11.59%
ROCE(5y)11.34%
ROICexcg growth 3Y-8.23%
ROICexcg growth 5Y-5.36%
ROICexc growth 3Y-3.27%
ROICexc growth 5Y7.94%
OM growth 3Y-2.38%
OM growth 5Y5.83%
PM growth 3Y-5.43%
PM growth 5Y9.94%
GM growth 3Y-1.81%
GM growth 5Y-1.2%
F-Score4
Asset Turnover0.41
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 4.28 | ||
| Debt/EBITDA | 1.21 | ||
| Cap/Depr | 102.34% | ||
| Cap/Sales | 10.32% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 79.26% | ||
| Profit Quality | 86.53% | ||
| Current Ratio | 1.19 | ||
| Quick Ratio | 0.79 | ||
| Altman-Z | 2.91 |
F-Score4
WACC6.83%
ROIC/WACC1.06
Cap/Depr(3y)99.64%
Cap/Depr(5y)92.04%
Cap/Sales(3y)9.36%
Cap/Sales(5y)8.84%
Profit Quality(3y)74.2%
Profit Quality(5y)84.7%
High Growth Momentum
Growth
EPS 1Y (TTM)1.77%
EPS 3Y-0.35%
EPS 5Y9.19%
EPS Q2Q%11.89%
EPS Next Y8.35%
EPS Next 2Y8.91%
EPS Next 3Y7.86%
EPS Next 5Y7.5%
Revenue 1Y (TTM)0.78%
Revenue growth 3Y2.43%
Revenue growth 5Y5.55%
Sales Q2Q%3.7%
Revenue Next Year4.01%
Revenue Next 2Y4%
Revenue Next 3Y3.79%
Revenue Next 5Y4.14%
EBIT growth 1Y-0.19%
EBIT growth 3Y-0.01%
EBIT growth 5Y11.7%
EBIT Next Year44.88%
EBIT Next 3Y17.71%
EBIT Next 5Y12.45%
FCF growth 1Y36.4%
FCF growth 3Y-9.07%
FCF growth 5Y5.53%
OCF growth 1Y21.19%
OCF growth 3Y-0.22%
OCF growth 5Y9.93%