MERCK KGAA (1MRK.MI) Stock Fundamental Analysis
BIT:1MRK - Euronext Milan - DE0006599905 - Common Stock - Currency: EUR
Overall 1MRK gets a fundamental rating of 4 out of 10. We evaluated 1MRK against 51 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 has a correct valuation and a medium 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.
In the past 5 years 1MRK has always been profitable.
1MRK had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
1MRK has a Return On Assets (5.38%) which is comparable to the rest of the industry.
1MRK has a Return On Equity (9.28%) which is in line with its industry peers.
1MRK has a Return On Invested Capital (7.26%) which is in line with its industry peers.
The Average Return On Invested Capital over the past 3 years for 1MRK is significantly below the industry average of 14.91%.
| 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
With a decent Profit Margin value of 13.12%, 1MRK is doing good in the industry, outperforming 70.59% of the companies in the same industry.
1MRK's Profit Margin has improved in the last couple of years.
With a Operating Margin value of 17.26%, 1MRK perfoms like the industry average, outperforming 52.94% of the companies in the same industry.
1MRK's Operating Margin has improved in the last couple of years.
1MRK has a worse Gross Margin (59.01%) than 64.71% of its industry peers.
1MRK's Gross Margin has been stable in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so 1MRK is still creating some value.
1MRK has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, 1MRK has about the same amount of shares outstanding.
1MRK has a better debt/assets ratio than last year.
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.
Looking at the Altman-Z score, with a value of 2.91, 1MRK is in line with its industry, outperforming 56.86% of the companies in the same industry.
The Debt to FCF ratio of 1MRK is 4.28, which is a neutral value as it means it would take 1MRK, 4.28 years of fcf income to pay off all of its debts.
1MRK's Debt to FCF ratio of 4.28 is fine compared to the rest of the industry. 1MRK outperforms 60.78% of its industry peers.
A Debt/Equity ratio of 0.23 indicates that 1MRK is not too dependend on debt financing.
1MRK has a Debt to Equity ratio of 0.23. This is in the better half of the industry: 1MRK outperforms 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.
1MRK has a Current ratio of 1.19. This is in the lower half of the industry: 1MRK underperforms 66.67% of its industry peers.
1MRK has a Quick Ratio of 1.19. This is a bad value and indicates that 1MRK is not financially healthy enough and could expect problems in meeting its short term obligations.
1MRK's Quick ratio of 0.79 is on the low side compared to the rest of the industry. 1MRK is outperformed by 64.71% of its industry peers.
| 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.
1MRK shows a small growth in Revenue. In the last year, the Revenue has grown by 0.78%.
1MRK shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.55% yearly.
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
The Earnings Per Share is expected to grow by 7.50% on average over the next years.
1MRK is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.14% yearly.
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
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
1MRK is valuated correctly with a Price/Earnings ratio of 13.70.
Based on the Price/Earnings ratio, 1MRK is valued a bit cheaper than the industry average as 74.51% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 28.22. 1MRK is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 12.64, which indicates a correct valuation of 1MRK.
Based on the Price/Forward Earnings ratio, 1MRK is valued a bit cheaper than the industry average as 70.59% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 20.86. 1MRK is valued slightly cheaper when compared to this.
| 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.
1MRK's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. 1MRK is cheaper than 62.75% of the companies in the same industry.
| 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.
1MRK's Dividend Yield is comparable with the industry average which is at 3.03.
1MRK's Dividend Yield is slightly below the S&P500 average, which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.8% |
5.2 History
On average, the dividend of 1MRK grows each year by 11.88%, which is quite nice.
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.
The dividend of 1MRK is growing, but the earnings are growing slower. 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%