MERCK & CO. INC. (1MRKX.MI) Stock Fundamental Analysis
Europe - Euronext Milan - BIT:1MRKX - US58933Y1055 - Common Stock
90.3 EUR
-0.1 (-0.11%)
Taking everything into account, 1MRKX scores 7 out of 10 in our fundamental rating. 1MRKX was compared to 54 industry peers in the Pharmaceuticals industry. 1MRKX scores excellent on profitability, but there are some minor concerns on its financial health. 1MRKX is valued quite cheap, while showing a decent growth score. This is a good combination! These ratings could make 1MRKX a good candidate for value investing.
1. Profitability
1.1 Basic Checks
- In the past year 1MRKX was profitable.
- In the past year 1MRKX had a positive cash flow from operations.
- 1MRKX had positive earnings in each of the past 5 years.
- 1MRKX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- 1MRKX has a Return On Assets of 14.69%. This is amongst the best in the industry. 1MRKX outperforms 89.09% of its industry peers.
- With an excellent Return On Equity value of 36.71%, 1MRKX belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
- The Return On Invested Capital of 1MRKX (12.83%) is better than 65.45% of its industry peers.
- 1MRKX had an Average Return On Invested Capital over the past 3 years of 13.67%. This is in line with the industry average of 13.93%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.69% | ||
| ROE | 36.71% | ||
| ROIC | 12.83% |
ROA(3y)9.42%
ROA(5y)9.66%
ROE(3y)23.17%
ROE(5y)26.32%
ROIC(3y)13.67%
ROIC(5y)12.02%
1.3 Margins
- With an excellent Profit Margin value of 29.63%, 1MRKX belongs to the best of the industry, outperforming 92.73% of the companies in the same industry.
- 1MRKX's Profit Margin has been stable in the last couple of years.
- With an excellent Operating Margin value of 38.08%, 1MRKX belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
- In the last couple of years the Operating Margin of 1MRKX has grown nicely.
- Looking at the Gross Margin, with a value of 78.72%, 1MRKX is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
- 1MRKX's Gross Margin has been stable in the last couple of years.
| 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
- 1MRKX has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- Compared to 1 year ago, 1MRKX has about the same amount of shares outstanding.
- 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.
2.2 Solvency
- An Altman-Z score of 4.09 indicates that 1MRKX is not in any danger for bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 4.09, 1MRKX is in line with its industry, outperforming 54.55% of the companies in the same industry.
- The Debt to FCF ratio of 1MRKX is 3.17, which is a good value as it means it would take 1MRKX, 3.17 years of fcf income to pay off all of its debts.
- Looking at the Debt to FCF ratio, with a value of 3.17, 1MRKX is in the better half of the industry, outperforming 70.91% of the companies in the same industry.
- A Debt/Equity ratio of 0.77 indicates that 1MRKX is somewhat dependend on debt financing.
- 1MRKX has a Debt to Equity ratio (0.77) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 3.17 | ||
| Altman-Z | 4.09 |
ROIC/WACC1.46
WACC8.79%
2.3 Liquidity
- A Current Ratio of 1.66 indicates that 1MRKX should not have too much problems paying its short term obligations.
- 1MRKX has a better Current ratio (1.66) than 67.27% of its industry peers.
- 1MRKX has a Quick Ratio of 1.44. This is a normal value and indicates that 1MRKX is financially healthy and should not expect problems in meeting its short term obligations.
- 1MRKX's Quick ratio of 1.44 is fine compared to the rest of the industry. 1MRKX outperforms 74.55% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.66 | ||
| Quick Ratio | 1.44 |
3. Growth
3.1 Past
- 1MRKX 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.
- 1MRKX shows a small growth in Revenue. In the last year, the Revenue has grown by 1.68%.
- 1MRKX shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.40% yearly.
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
- The Earnings Per Share is expected to grow by 6.65% on average over the next years.
- Based on estimates for the next years, 1MRKX will show a small growth in Revenue. The Revenue will grow by 2.64% on average per year.
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.
- 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
- Based on the Price/Earnings ratio of 11.93, the valuation of 1MRKX can be described as reasonable.
- Based on the Price/Earnings ratio, 1MRKX is valued cheaply inside the industry as 81.82% of the companies are valued more expensively.
- The average S&P500 Price/Earnings ratio is at 27.21. 1MRKX is valued rather cheaply when compared to this.
- A Price/Forward Earnings ratio of 11.38 indicates a reasonable valuation of 1MRKX.
- Based on the Price/Forward Earnings ratio, 1MRKX is valued a bit cheaper than 78.18% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 24.26. 1MRKX is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.93 | ||
| Fwd PE | 11.38 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of 1MRKX indicates a somewhat cheap valuation: 1MRKX is cheaper than 78.18% of the companies listed in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of 1MRKX indicates a somewhat cheap valuation: 1MRKX is cheaper than 70.91% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20 | ||
| EV/EBITDA | 9.79 |
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.
- The excellent profitability rating of 1MRKX may justify a higher PE ratio.
PEG (NY)0.64
PEG (5Y)1.48
EPS Next 2Y9.96%
EPS Next 3Y10.87%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 3.06%, 1MRKX has a reasonable but not impressive dividend return.
- 1MRKX's Dividend Yield is a higher than the industry average which is at 1.59.
- 1MRKX's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.06% |
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
- 1MRKX pays out 42.60% of its income as dividend. 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.
DP42.6%
EPS Next 2Y9.96%
EPS Next 3Y10.87%
MERCK & CO. INC. / 1MRKX.MI FAQ
What is the ChartMill fundamental rating of MERCK & CO. INC. (1MRKX.MI) stock?
ChartMill assigns a fundamental rating of 7 / 10 to 1MRKX.MI.
Can you provide the valuation status for MERCK & CO. INC.?
ChartMill assigns a valuation rating of 8 / 10 to MERCK & CO. INC. (1MRKX.MI). This can be considered as Undervalued.
What is the profitability of 1MRKX stock?
MERCK & CO. INC. (1MRKX.MI) has a profitability rating of 8 / 10.
What are the PE and PB ratios of MERCK & CO. INC. (1MRKX.MI) stock?
The Price/Earnings (PE) ratio for MERCK & CO. INC. (1MRKX.MI) is 11.93 and the Price/Book (PB) ratio is 5.03.
Is the dividend of MERCK & CO. INC. sustainable?
The dividend rating of MERCK & CO. INC. (1MRKX.MI) is 6 / 10 and the dividend payout ratio is 42.6%.