MERCK & CO. INC. (6MK.DE) Stock Fundamental Analysis
FRA:6MK - Deutsche Boerse Ag - US58933Y1055 - Common Stock - Currency: EUR
We assign a fundamental rating of 7 out of 10 to 6MK. 6MK was compared to 51 industry peers in the Pharmaceuticals industry. 6MK gets an excellent profitability rating and is at the same time showing great financial health properties. 6MK scores decently on growth, while it is valued quite cheap. This could make an interesting combination. 6MK also has an excellent dividend rating. These ratings would make 6MK suitable for value and dividend and quality investing!
1. Profitability
1.1 Basic Checks
In the past year 6MK was profitable.
6MK had a positive operating cash flow in the past year.
In the past 5 years 6MK has always been profitable.
6MK had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
6MK has a Return On Assets of 15.14%. This is amongst the best in the industry. 6MK outperforms 88.24% of its industry peers.
With an excellent Return On Equity value of 36.07%, 6MK belongs to the best of the industry, outperforming 84.31% of the companies in the same industry.
With a decent Return On Invested Capital value of 12.73%, 6MK is doing good in the industry, outperforming 62.75% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for 6MK is in line with the industry average of 15.19%.
| Industry Rank | Sector 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%
1.3 Margins
6MK's Profit Margin of 27.27% is amongst the best of the industry. 6MK outperforms 92.16% of its industry peers.
6MK's Profit Margin has been stable in the last couple of years.
6MK has a Operating Margin of 33.84%. This is amongst the best in the industry. 6MK outperforms 88.24% of its industry peers.
6MK's Operating Margin has improved in the last couple of years.
6MK has a Gross Margin of 78.17%. This is in the better half of the industry: 6MK outperforms 74.51% of its industry peers.
In the last couple of years the Gross Margin of 6MK has grown nicely.
| Industry Rank | Sector 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%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), 6MK is creating some value.
Compared to 1 year ago, 6MK has about the same amount of shares outstanding.
6MK has less shares outstanding than it did 5 years ago.
6MK has a better debt/assets ratio than last year.
2.2 Solvency
6MK has an Altman-Z score of 3.83. This indicates that 6MK is financially healthy and has little risk of bankruptcy at the moment.
6MK has a Altman-Z score of 3.83. This is in the better half of the industry: 6MK outperforms 68.63% of its industry peers.
The Debt to FCF ratio of 6MK is 2.04, which is a good value as it means it would take 6MK, 2.04 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 2.04, 6MK belongs to the best of the industry, outperforming 88.24% of the companies in the same industry.
A Debt/Equity ratio of 0.69 indicates that 6MK is somewhat dependend on debt financing.
6MK has a Debt to Equity ratio of 0.69. This is comparable to the rest of the industry: 6MK outperforms 47.06% of its industry peers.
Although 6MK 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 Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.69 | ||
| Debt/FCF | 2.04 | ||
| Altman-Z | 3.83 |
ROIC/WACC1.4
WACC9.09%
2.3 Liquidity
6MK has a Current Ratio of 1.41. This is a normal value and indicates that 6MK is financially healthy and should not expect problems in meeting its short term obligations.
6MK's Current ratio of 1.41 is in line compared to the rest of the industry. 6MK outperforms 50.98% of its industry peers.
A Quick Ratio of 1.16 indicates that 6MK should not have too much problems paying its short term obligations.
6MK has a Quick ratio of 1.16. This is in the better half of the industry: 6MK outperforms 70.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.41 | ||
| Quick Ratio | 1.16 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 258.99% over the past year.
6MK shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.04% yearly.
Looking at the last year, 6MK shows a small growth in Revenue. The Revenue has grown by 4.10% in the last year.
6MK shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.40% yearly.
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
The Earnings Per Share is expected to grow by 6.16% on average over the next years.
Based on estimates for the next years, 6MK will show a small growth in Revenue. The Revenue will grow by 2.43% on average per year.
EPS Next Y17.73%
EPS Next 2Y13.58%
EPS Next 3Y12.74%
EPS Next 5Y6.16%
Revenue Next Year1.68%
Revenue Next 2Y3.64%
Revenue Next 3Y4.27%
Revenue Next 5Y2.43%
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.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 9.91 indicates a reasonable valuation of 6MK.
Based on the Price/Earnings ratio, 6MK is valued a bit cheaper than 78.43% of the companies in the same industry.
When comparing the Price/Earnings ratio of 6MK to the average of the S&P500 Index (25.82), we can say 6MK is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 7.83, the valuation of 6MK can be described as very cheap.
Based on the Price/Forward Earnings ratio, 6MK is valued cheaper than 84.31% of the companies in the same industry.
6MK is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.91 | ||
| Fwd PE | 7.83 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, 6MK is valued a bit cheaper than the industry average as 74.51% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, 6MK is valued cheaply inside the industry as 84.31% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.37 | ||
| EV/EBITDA | 8.34 |
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 6MK may justify a higher PE ratio.
6MK's earnings are expected to grow with 12.74% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.56
PEG (5Y)1.23
EPS Next 2Y13.58%
EPS Next 3Y12.74%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.21%, 6MK is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.05, 6MK pays a better dividend. On top of this 6MK pays more dividend than 84.31% of the companies listed in the same industry.
6MK's Dividend Yield is rather good when compared to the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.21% |
5.2 History
On average, the dividend of 6MK grows each year by 6.90%, which is quite nice.
Dividend Growth(5Y)6.9%
Div Incr Years8
Div Non Decr Years8
5.3 Sustainability
45.54% of the earnings are spent on dividend by 6MK. This is a bit on the high side, but may be sustainable.
6MK's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP45.54%
EPS Next 2Y13.58%
EPS Next 3Y12.74%
FRA:6MK (5/23/2025, 7:00:00 PM)
68.3
+0.1 (+0.15%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners79.95%
Inst Owner ChangeN/A
Ins Owners0.05%
Ins Owner ChangeN/A
Market Cap171.50B
Analysts77.5
Price Target94.66 (38.59%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.21% |
Yearly Dividend2.74
Dividend Growth(5Y)6.9%
DP45.54%
Div Incr Years8
Div Non Decr Years8
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)-12%
PT rev (3m)-21.69%
EPS NQ rev (1m)-5.53%
EPS NQ rev (3m)-8.39%
EPS NY rev (1m)-0.73%
EPS NY rev (3m)-0.84%
Revenue NQ rev (1m)-0.27%
Revenue NQ rev (3m)-1.61%
Revenue NY rev (1m)0.11%
Revenue NY rev (3m)-0.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.91 | ||
| Fwd PE | 7.83 | ||
| P/S | 3.03 | ||
| P/FCF | 11.37 | ||
| P/OCF | 9.28 | ||
| P/B | 4.01 | ||
| P/tB | 17.79 | ||
| EV/EBITDA | 8.34 |
EPS(TTM)6.89
EY10.09%
EPS(NY)8.72
Fwd EY12.77%
FCF(TTM)6
FCFY8.79%
OCF(TTM)7.36
OCFY10.77%
SpS22.53
BVpS17.03
TBVpS3.84
PEG (NY)0.56
PEG (5Y)1.23
Profitability
| Industry Rank | Sector 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 Rank | Sector 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 | 3.83 |
F-Score8
WACC9.09%
ROIC/WACC1.4
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 Y17.73%
EPS Next 2Y13.58%
EPS Next 3Y12.74%
EPS Next 5Y6.16%
Revenue 1Y (TTM)4.1%
Revenue growth 3Y9.63%
Revenue growth 5Y10.4%
Sales Q2Q%-1.56%
Revenue Next Year1.68%
Revenue Next 2Y3.64%
Revenue Next 3Y4.27%
Revenue Next 5Y2.43%
EBIT growth 1Y-3.79%
EBIT growth 3Y14.48%
EBIT growth 5Y18.33%
EBIT Next Year30.08%
EBIT Next 3Y15.02%
EBIT Next 5Y9.19%
FCF growth 1Y51.3%
FCF growth 3Y23.27%
FCF growth 5Y12.67%
OCF growth 1Y33.21%
OCF growth 3Y15.02%
OCF growth 5Y9.82%