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MERCK & CO. INC. (1MRKX.MI) Stock Fundamental Analysis

BIT:1MRKX - Euronext Milan - US58933Y1055 - Common Stock - Currency: EUR

71.4  +1.6 (+2.29%)

Fundamental Rating

7

We assign a fundamental rating of 7 out of 10 to 1MRKX. 1MRKX was compared to 52 industry peers in the Pharmaceuticals industry. 1MRKX scores excellent points on both the profitability and health parts. This is a solid base for a good stock. 1MRKX is valued quite cheap, while showing a decent growth score. This is a good combination! This makes 1MRKX very considerable for value and quality investing!


Dividend Valuation Growth Profitability Health

8

1. Profitability

1.1 Basic Checks

In the past year 1MRKX was profitable.
1MRKX had a positive operating cash flow in the past year.
1MRKX had positive earnings in each of the past 5 years.
In the past 5 years 1MRKX always reported a positive cash flow from operatings.
1MRKX.MI Yearly Net Income VS EBIT VS OCF VS FCF1MRKX.MI Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5B 10B 15B 20B

1.2 Ratios

1MRKX's Return On Assets of 15.14% is amongst the best of the industry. 1MRKX outperforms 92.31% of its industry peers.
1MRKX has a Return On Equity of 36.07%. This is amongst the best in the industry. 1MRKX outperforms 88.46% of its industry peers.
1MRKX has a better Return On Invested Capital (12.73%) than 65.38% of its industry peers.
1MRKX had an Average Return On Invested Capital over the past 3 years of 13.49%. This is in line with the industry average of 15.20%.
Industry RankSector Rank
ROA 15.14%
ROE 36.07%
ROIC 12.73%
ROA(3y)9.42%
ROA(5y)9.66%
ROE(3y)23.17%
ROE(5y)26.32%
ROIC(3y)13.49%
ROIC(5y)11.91%
1MRKX.MI Yearly ROA, ROE, ROIC1MRKX.MI Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30

1.3 Margins

1MRKX has a Profit Margin of 27.27%. This is amongst the best in the industry. 1MRKX outperforms 94.23% of its industry peers.
In the last couple of years the Profit Margin of 1MRKX has remained more or less at the same level.
1MRKX's Operating Margin of 33.84% is amongst the best of the industry. 1MRKX outperforms 90.38% of its industry peers.
In the last couple of years the Operating Margin of 1MRKX has grown nicely.
Looking at the Gross Margin, with a value of 78.17%, 1MRKX is in the better half of the industry, outperforming 78.85% of the companies in the same industry.
In the last couple of years the Gross Margin of 1MRKX has grown nicely.
Industry RankSector Rank
OM 33.84%
PM (TTM) 27.27%
GM 78.17%
OM growth 3Y4.43%
OM growth 5Y7.18%
PM growth 3Y-0.15%
PM growth 5Y1.18%
GM growth 3Y3.55%
GM growth 5Y2.42%
1MRKX.MI Yearly Profit, Operating, Gross Margins1MRKX.MI Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20 40 60 80

7

2. Health

2.1 Basic Checks

1MRKX has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for 1MRKX remains at a similar level compared to 1 year ago.
The number of shares outstanding for 1MRKX has been reduced compared to 5 years ago.
Compared to 1 year ago, 1MRKX has an improved debt to assets ratio.
1MRKX.MI Yearly Shares Outstanding1MRKX.MI Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 500M 1B 1.5B 2B 2.5B
1MRKX.MI Yearly Total Debt VS Total Assets1MRKX.MI Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20B 40B 60B 80B 100B

2.2 Solvency

An Altman-Z score of 3.93 indicates that 1MRKX is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.93, 1MRKX is in the better half of the industry, outperforming 61.54% of the companies in the same industry.
The Debt to FCF ratio of 1MRKX is 2.04, which is a good value as it means it would take 1MRKX, 2.04 years of fcf income to pay off all of its debts.
1MRKX has a Debt to FCF ratio of 2.04. This is amongst the best in the industry. 1MRKX outperforms 88.46% of its industry peers.
1MRKX has a Debt/Equity ratio of 0.69. This is a neutral value indicating 1MRKX is somewhat dependend on debt financing.
1MRKX's Debt to Equity ratio of 0.69 is in line compared to the rest of the industry. 1MRKX outperforms 48.08% of its industry peers.
Although 1MRKX does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
Industry RankSector Rank
Debt/Equity 0.69
Debt/FCF 2.04
Altman-Z 3.93
ROIC/WACC1.41
WACC9.04%
1MRKX.MI Yearly LT Debt VS Equity VS FCF1MRKX.MI Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10B 20B 30B 40B

2.3 Liquidity

1MRKX has a Current Ratio of 1.41. This is a normal value and indicates that 1MRKX is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.41, 1MRKX is in line with its industry, outperforming 59.62% of the companies in the same industry.
1MRKX has a Quick Ratio of 1.16. This is a normal value and indicates that 1MRKX is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.16, 1MRKX is in the better half of the industry, outperforming 73.08% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 1.41
Quick Ratio 1.16
1MRKX.MI Yearly Current Assets VS Current Liabilites1MRKX.MI Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10B 20B 30B

5

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 258.99% over the past year.
The Earnings Per Share has been growing by 8.04% on average over the past years. This is quite good.
The Revenue has been growing slightly by 4.10% 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)258.99%
EPS 3Y6.87%
EPS 5Y8.04%
EPS Q2Q%7.25%
Revenue 1Y (TTM)4.1%
Revenue growth 3Y9.63%
Revenue growth 5Y10.4%
Sales Q2Q%-1.56%

3.2 Future

Based on estimates for the next years, 1MRKX will show a small growth in Earnings Per Share. The EPS will grow by 5.96% on average per year.
Based on estimates for the next years, 1MRKX will show a small growth in Revenue. The Revenue will grow by 2.20% on average per year.
EPS Next Y17.37%
EPS Next 2Y13.89%
EPS Next 3Y12.94%
EPS Next 5Y5.96%
Revenue Next Year1.51%
Revenue Next 2Y3.63%
Revenue Next 3Y4.2%
Revenue Next 5Y2.2%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
1MRKX.MI Yearly Revenue VS Estimates1MRKX.MI Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 20B 40B 60B
1MRKX.MI Yearly EPS VS Estimates1MRKX.MI Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2 4 6 8 10

9

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 10.70 indicates a reasonable valuation of 1MRKX.
1MRKX's Price/Earnings ratio is rather cheap when compared to the industry. 1MRKX is cheaper than 80.77% of the companies in the same industry.
1MRKX's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.35.
A Price/Forward Earnings ratio of 8.42 indicates a reasonable valuation of 1MRKX.
1MRKX's Price/Forward Earnings ratio is rather cheap when compared to the industry. 1MRKX is cheaper than 86.54% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of 1MRKX to the average of the S&P500 Index (37.54), we can say 1MRKX is valued rather cheaply.
Industry RankSector Rank
PE 10.7
Fwd PE 8.42
1MRKX.MI Price Earnings VS Forward Price Earnings1MRKX.MI Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80 100

4.2 Price Multiples

75.00% of the companies in the same industry are more expensive than 1MRKX, based on the Enterprise Value to EBITDA ratio.
86.54% of the companies in the same industry are more expensive than 1MRKX, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 12.29
EV/EBITDA 8.79
1MRKX.MI Per share data1MRKX.MI EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 5 10 15 20

4.3 Compensation for Growth

1MRKX'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 1MRKX may justify a higher PE ratio.
A more expensive valuation may be justified as 1MRKX's earnings are expected to grow with 12.94% in the coming years.
PEG (NY)0.62
PEG (5Y)1.33
EPS Next 2Y13.89%
EPS Next 3Y12.94%

6

5. Dividend

5.1 Amount

1MRKX has a Yearly Dividend Yield of 3.86%.
The stock price of 1MRKX dropped by -43.01% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
1MRKX's Dividend Yield is a higher than the industry average which is at 3.00.
1MRKX's Dividend Yield is rather good when compared to the S&P500 average which is at 2.36.
Industry RankSector Rank
Dividend Yield 3.86%

5.2 History

On average, the dividend of 1MRKX grows each year by 6.90%, which is quite nice.
Dividend Growth(5Y)6.9%
Div Incr Years0
Div Non Decr Years0

5.3 Sustainability

45.54% of the earnings are spent on dividend by 1MRKX. This is a bit on the high side, but may be sustainable.
1MRKX's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP45.54%
EPS Next 2Y13.89%
EPS Next 3Y12.94%
1MRKX.MI Yearly Income VS Free CF VS Dividend1MRKX.MI Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5B 10B 15B
1MRKX.MI Dividend Payout.1MRKX.MI Dividend Payout, showing the Payout Ratio.1MRKX.MI Dividend Payout.PayoutRetained Earnings

MERCK & CO. INC.

BIT:1MRKX (7/24/2025, 7:00:00 PM)

71.4

+1.6 (+2.29%)

Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)04-24 2025-04-24/bmo
Earnings (Next)07-29 2025-07-29/bmo
Inst Owners80.57%
Inst Owner ChangeN/A
Ins Owners0.05%
Ins Owner ChangeN/A
Market Cap179.29B
Analysts76.25
Price Target92.02 (28.88%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 3.86%
Yearly Dividend2.65
Dividend Growth(5Y)6.9%
DP45.54%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.19%
Min EPS beat(2)2.93%
Max EPS beat(2)5.44%
EPS beat(4)4
Avg EPS beat(4)4.13%
Min EPS beat(4)2.93%
Max EPS beat(4)5.44%
EPS beat(8)8
Avg EPS beat(8)20.93%
EPS beat(12)12
Avg EPS beat(12)16.06%
EPS beat(16)15
Avg EPS beat(16)14.76%
Revenue beat(2)1
Avg Revenue beat(2)0.18%
Min Revenue beat(2)-0.1%
Max Revenue beat(2)0.45%
Revenue beat(4)3
Avg Revenue beat(4)0.32%
Min Revenue beat(4)-0.1%
Max Revenue beat(4)0.71%
Revenue beat(8)6
Avg Revenue beat(8)1.27%
Revenue beat(12)10
Avg Revenue beat(12)1.96%
Revenue beat(16)14
Avg Revenue beat(16)2.49%
PT rev (1m)-0.22%
PT rev (3m)-14.96%
EPS NQ rev (1m)-0.61%
EPS NQ rev (3m)-5.36%
EPS NY rev (1m)-0.31%
EPS NY rev (3m)-1.2%
Revenue NQ rev (1m)0.34%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)-0.16%
Revenue NY rev (3m)-0.15%
Valuation
Industry RankSector Rank
PE 10.7
Fwd PE 8.42
P/S 3.28
P/FCF 12.29
P/OCF 10.03
P/B 4.33
P/tB 19.23
EV/EBITDA 8.79
EPS(TTM)6.67
EY9.34%
EPS(NY)8.48
Fwd EY11.88%
FCF(TTM)5.81
FCFY8.13%
OCF(TTM)7.12
OCFY9.97%
SpS21.79
BVpS16.48
TBVpS3.71
PEG (NY)0.62
PEG (5Y)1.33
Profitability
Industry RankSector Rank
ROA 15.14%
ROE 36.07%
ROCE 24.05%
ROIC 12.73%
ROICexc 14.19%
ROICexgc 26.46%
OM 33.84%
PM (TTM) 27.27%
GM 78.17%
FCFM 26.66%
ROA(3y)9.42%
ROA(5y)9.66%
ROE(3y)23.17%
ROE(5y)26.32%
ROIC(3y)13.49%
ROIC(5y)11.91%
ROICexc(3y)15.56%
ROICexc(5y)13.63%
ROICexgc(3y)33.79%
ROICexgc(5y)31.28%
ROCE(3y)25.47%
ROCE(5y)22.5%
ROICexcg growth 3Y6.23%
ROICexcg growth 5Y2.59%
ROICexc growth 3Y13.83%
ROICexc growth 5Y9.86%
OM growth 3Y4.43%
OM growth 5Y7.18%
PM growth 3Y-0.15%
PM growth 5Y1.18%
GM growth 3Y3.55%
GM growth 5Y2.42%
F-Score8
Asset Turnover0.56
Health
Industry RankSector Rank
Debt/Equity 0.69
Debt/FCF 2.04
Debt/EBITDA 1.28
Cap/Depr 83.2%
Cap/Sales 6.01%
Interest Coverage 16.44
Cash Conversion 79.55%
Profit Quality 97.73%
Current Ratio 1.41
Quick Ratio 1.16
Altman-Z 3.93
F-Score8
WACC9.04%
ROIC/WACC1.41
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)258.99%
EPS 3Y6.87%
EPS 5Y8.04%
EPS Q2Q%7.25%
EPS Next Y17.37%
EPS Next 2Y13.89%
EPS Next 3Y12.94%
EPS Next 5Y5.96%
Revenue 1Y (TTM)4.1%
Revenue growth 3Y9.63%
Revenue growth 5Y10.4%
Sales Q2Q%-1.56%
Revenue Next Year1.51%
Revenue Next 2Y3.63%
Revenue Next 3Y4.2%
Revenue Next 5Y2.2%
EBIT growth 1Y-3.79%
EBIT growth 3Y14.48%
EBIT growth 5Y18.33%
EBIT Next Year30.08%
EBIT Next 3Y15.02%
EBIT Next 5Y9.31%
FCF growth 1Y51.3%
FCF growth 3Y23.27%
FCF growth 5Y12.67%
OCF growth 1Y33.21%
OCF growth 3Y15.02%
OCF growth 5Y9.82%