MERCK & CO. INC. (6MK.DE) Stock Fundamental Analysis
FRA:6MK - Deutsche Boerse Ag - US58933Y1055 - Common Stock - Currency: EUR
6MK gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 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.
In the past year 6MK had a positive cash flow from operations.
6MK had positive earnings in each of the past 5 years.
6MK had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
6MK's Return On Assets of 14.62% is amongst the best of the industry. 6MK outperforms 88.24% of its industry peers.
Looking at the Return On Equity, with a value of 36.96%, 6MK belongs to the top of the industry, outperforming 88.24% of the companies in the same industry.
With a decent Return On Invested Capital value of 13.25%, 6MK is doing good in the industry, outperforming 72.55% 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 14.91%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.62% | ||
| ROE | 36.96% | ||
| ROIC | 13.25% |
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
Looking at the Profit Margin, with a value of 26.68%, 6MK belongs to the top of the industry, outperforming 90.20% of the companies in the same industry.
In the last couple of years the Profit Margin of 6MK has remained more or less at the same level.
6MK's Operating Margin of 34.59% is amongst the best of the industry. 6MK outperforms 88.24% of its industry peers.
In the last couple of years the Operating Margin of 6MK has grown nicely.
With a decent Gross Margin value of 78.19%, 6MK is doing good in the industry, outperforming 76.47% of the companies in the same industry.
6MK's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 34.59% | ||
| PM (TTM) | 26.68% | ||
| GM | 78.19% |
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.
The debt/assets ratio for 6MK has been reduced compared to a year ago.
2.2 Solvency
6MK has an Altman-Z score of 3.85. This indicates that 6MK is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.85, 6MK is in the better half of the industry, outperforming 68.63% of the companies in the same industry.
The Debt to FCF ratio of 6MK is 2.05, which is a good value as it means it would take 6MK, 2.05 years of fcf income to pay off all of its debts.
6MK has a better Debt to FCF ratio (2.05) than 84.31% of its industry peers.
6MK has a Debt/Equity ratio of 0.74. This is a neutral value indicating 6MK is somewhat dependend on debt financing.
The Debt to Equity ratio of 6MK (0.74) is comparable to the rest of the industry.
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 | 0.74 | ||
| Debt/FCF | 2.05 | ||
| Altman-Z | 3.85 |
ROIC/WACC1.49
WACC8.92%
2.3 Liquidity
A Current Ratio of 1.36 indicates that 6MK should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.36, 6MK is in line with its industry, outperforming 50.98% of the companies in the same industry.
A Quick Ratio of 1.15 indicates that 6MK should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.15, 6MK is doing good in the industry, outperforming 68.63% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.36 | ||
| Quick Ratio | 1.15 |
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.
The Revenue has been growing slightly by 4.10% in the past year.
Measured over the past years, 6MK shows a quite strong growth in Revenue. The Revenue has been growing by 10.40% on average per year.
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, 6MK will show a small growth in Earnings Per Share. The EPS will grow by 6.16% on average per year.
The Revenue is expected to grow by 2.43% on average over the next years.
EPS Next Y18.6%
EPS Next 2Y14.32%
EPS Next 3Y13.3%
EPS Next 5Y6.16%
Revenue Next Year1.56%
Revenue Next 2Y3.93%
Revenue Next 3Y4.56%
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.
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
The Price/Earnings ratio is 10.79, which indicates a very decent valuation of 6MK.
Based on the Price/Earnings ratio, 6MK is valued a bit cheaper than the industry average as 78.43% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 28.22, 6MK is valued rather cheaply.
6MK is valuated reasonably with a Price/Forward Earnings ratio of 8.42.
6MK's Price/Forward Earnings ratio is rather cheap when compared to the industry. 6MK is cheaper than 86.27% of the companies in the same industry.
6MK is valuated cheaply when we compare the Price/Forward Earnings ratio to 20.86, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.79 | ||
| Fwd PE | 8.42 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of 6MK indicates a somewhat cheap valuation: 6MK is cheaper than 70.59% of the companies listed in the same industry.
82.35% of the companies in the same industry are more expensive than 6MK, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.69 | ||
| EV/EBITDA | 8.88 |
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.
6MK has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as 6MK's earnings are expected to grow with 13.30% in the coming years.
PEG (NY)0.58
PEG (5Y)1.34
EPS Next 2Y14.32%
EPS Next 3Y13.3%
5. Dividend
5.1 Amount
6MK has a Yearly Dividend Yield of 4.06%, which is a nice return.
The stock price of 6MK dropped by -22.70% 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.
6MK's Dividend Yield is a higher than the industry average which is at 3.13.
6MK's Dividend Yield is rather good when compared to the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.06% |
5.2 History
The dividend of 6MK is nicely growing with an annual growth rate of 6.90%!
Dividend Growth(5Y)6.9%
Div Incr Years8
Div Non Decr Years8
5.3 Sustainability
45.80% 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.
DP45.8%
EPS Next 2Y14.32%
EPS Next 3Y13.3%
FRA:6MK (5/2/2025, 7:00:00 PM)
73.9
-0.9 (-1.2%)
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 Cap185.96B
Analysts78.62
Price Target97.4 (31.8%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.06% |
Yearly Dividend2.73
Dividend Growth(5Y)6.9%
DP45.8%
Div Incr Years8
Div Non Decr Years8
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.4%
Min EPS beat(2)3.35%
Max EPS beat(2)5.44%
EPS beat(4)4
Avg EPS beat(4)5.72%
Min EPS beat(4)3.35%
Max EPS beat(4)9.3%
EPS beat(8)8
Avg EPS beat(8)21.17%
EPS beat(12)12
Avg EPS beat(12)17.11%
EPS beat(16)14
Avg EPS beat(16)13.66%
Revenue beat(2)1
Avg Revenue beat(2)0.05%
Min Revenue beat(2)-0.1%
Max Revenue beat(2)0.2%
Revenue beat(4)3
Avg Revenue beat(4)0.9%
Min Revenue beat(4)-0.1%
Max Revenue beat(4)2.78%
Revenue beat(8)6
Avg Revenue beat(8)1.72%
Revenue beat(12)10
Avg Revenue beat(12)2.52%
Revenue beat(16)13
Avg Revenue beat(16)1.4%
PT rev (1m)-13.07%
PT rev (3m)-23.58%
EPS NQ rev (1m)0.36%
EPS NQ rev (3m)-5.97%
EPS NY rev (1m)-0.17%
EPS NY rev (3m)-5.42%
Revenue NQ rev (1m)-1.71%
Revenue NQ rev (3m)-7.01%
Revenue NY rev (1m)-0.27%
Revenue NY rev (3m)-3.46%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.79 | ||
| Fwd PE | 8.42 | ||
| P/S | 3.3 | ||
| P/FCF | 11.69 | ||
| P/OCF | 9.85 | ||
| P/B | 4.57 | ||
| P/tB | 25.56 | ||
| EV/EBITDA | 8.88 |
EPS(TTM)6.85
EY9.27%
EPS(NY)8.78
Fwd EY11.88%
FCF(TTM)6.32
FCFY8.56%
OCF(TTM)7.5
OCFY10.15%
SpS22.42
BVpS16.18
TBVpS2.89
PEG (NY)0.58
PEG (5Y)1.34
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.62% | ||
| ROE | 36.96% | ||
| ROCE | 25.03% | ||
| ROIC | 13.25% | ||
| ROICexc | 15.67% | ||
| ROICexgc | 31.8% | ||
| OM | 34.59% | ||
| PM (TTM) | 26.68% | ||
| GM | 78.19% | ||
| FCFM | 28.2% |
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 Turnover0.55
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.74 | ||
| Debt/FCF | 2.05 | ||
| Debt/EBITDA | 1.29 | ||
| Cap/Depr | 74.95% | ||
| Cap/Sales | 5.25% | ||
| Interest Coverage | 17.07 | ||
| Cash Conversion | 80.42% | ||
| Profit Quality | 105.72% | ||
| Current Ratio | 1.36 | ||
| Quick Ratio | 1.15 | ||
| Altman-Z | 3.85 |
F-Score8
WACC8.92%
ROIC/WACC1.49
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 Y18.6%
EPS Next 2Y14.32%
EPS Next 3Y13.3%
EPS Next 5Y6.16%
Revenue 1Y (TTM)4.1%
Revenue growth 3Y9.63%
Revenue growth 5Y10.4%
Sales Q2Q%-1.56%
Revenue Next Year1.56%
Revenue Next 2Y3.93%
Revenue Next 3Y4.56%
Revenue Next 5Y2.43%
EBIT growth 1Y4.93%
EBIT growth 3Y14.48%
EBIT growth 5Y18.33%
EBIT Next Year31.15%
EBIT Next 3Y15.65%
EBIT Next 5Y9.19%
FCF growth 1Y97.92%
FCF growth 3Y23.27%
FCF growth 5Y12.67%
OCF growth 1Y65.06%
OCF growth 3Y15.02%
OCF growth 5Y9.82%