MERCK KGAA (MRK.DE) Stock Fundamental Analysis
FRA:MRK - Deutsche Boerse Ag - DE0006599905 - Common Stock - Currency: EUR
Taking everything into account, MRK scores 4 out of 10 in our fundamental rating. MRK was compared to 50 industry peers in the Pharmaceuticals industry. Both the profitability and the financial health of MRK get a neutral evaluation. Nothing too spectacular is happening here. MRK has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year MRK was profitable.
MRK had a positive operating cash flow in the past year.
Each year in the past 5 years MRK has been profitable.
In the past 5 years MRK always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 5.38%, MRK is in line with its industry, outperforming 56.00% of the companies in the same industry.
With a Return On Equity value of 9.28%, MRK perfoms like the industry average, outperforming 56.00% of the companies in the same industry.
MRK has a Return On Invested Capital (7.26%) which is in line with its industry peers.
MRK had an Average Return On Invested Capital over the past 3 years of 9.28%. This is significantly below the industry average of 15.13%.
| 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
The Profit Margin of MRK (13.12%) is better than 70.00% of its industry peers.
MRK's Profit Margin has improved in the last couple of years.
With a Operating Margin value of 17.26%, MRK perfoms like the industry average, outperforming 52.00% of the companies in the same industry.
In the last couple of years the Operating Margin of MRK has grown nicely.
MRK has a Gross Margin of 59.01%. This is in the lower half of the industry: MRK underperforms 66.00% of its industry peers.
In the last couple of years the Gross Margin of MRK has remained more or less at the same level.
| 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
MRK 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 MRK remains at a similar level compared to 1 year ago.
Compared to 5 years ago, MRK has about the same amount of shares outstanding.
MRK has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.98 indicates that MRK is not a great score, but indicates only limited risk for bankruptcy at the moment.
MRK has a Altman-Z score (2.98) which is in line with its industry peers.
The Debt to FCF ratio of MRK is 4.28, which is a neutral value as it means it would take MRK, 4.28 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 4.28, MRK is in line with its industry, outperforming 60.00% of the companies in the same industry.
A Debt/Equity ratio of 0.23 indicates that MRK is not too dependend on debt financing.
MRK has a better Debt to Equity ratio (0.23) than 66.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 4.28 | ||
| Altman-Z | 2.98 |
ROIC/WACC1.06
WACC6.84%
2.3 Liquidity
MRK has a Current Ratio of 1.19. This is a normal value and indicates that MRK is financially healthy and should not expect problems in meeting its short term obligations.
MRK's Current ratio of 1.19 is on the low side compared to the rest of the industry. MRK is outperformed by 68.00% of its industry peers.
A Quick Ratio of 0.79 indicates that MRK may have some problems paying its short term obligations.
MRK's Quick ratio of 0.79 is on the low side compared to the rest of the industry. MRK is outperformed by 66.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.19 | ||
| Quick Ratio | 0.79 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 1.77% over the past year.
MRK shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.19% yearly.
MRK shows a small growth in Revenue. In the last year, the Revenue has grown by 0.78%.
Measured over the past years, MRK shows a small growth in Revenue. The Revenue has been growing by 5.55% on average per year.
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.
MRK 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
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
A Price/Earnings ratio of 14.03 indicates a correct valuation of MRK.
Compared to the rest of the industry, the Price/Earnings ratio of MRK indicates a somewhat cheap valuation: MRK is cheaper than 72.00% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of MRK to the average of the S&P500 Index (23.99), we can say MRK is valued slightly cheaper.
A Price/Forward Earnings ratio of 12.95 indicates a correct valuation of MRK.
Based on the Price/Forward Earnings ratio, MRK is valued a bit cheaper than 68.00% of the companies in the same industry.
MRK is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 20.35, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.03 | ||
| Fwd PE | 12.95 |
4.2 Price Multiples
MRK's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MRK is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.92 | ||
| EV/EBITDA | 10.42 |
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)1.68
PEG (5Y)1.53
EPS Next 2Y8.91%
EPS Next 3Y7.86%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.80%, MRK has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.06, MRK has a dividend in line with its industry peers.
Compared to the average S&P500 Dividend Yield of 2.44, MRK is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.8% |
5.2 History
On average, the dividend of MRK grows each year by 11.88%, which is quite nice.
Dividend Growth(5Y)11.88%
Div Incr Years2
Div Non Decr Years3
5.3 Sustainability
MRK pays out 10.23% of its income as dividend. This is a sustainable payout ratio.
MRK's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP10.23%
EPS Next 2Y8.91%
EPS Next 3Y7.86%
FRA:MRK (5/7/2025, 7:00:00 PM)
121.1
-2.7 (-2.18%)
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 Cap52.65B
Analysts80
Price Target176.94 (46.11%)
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 Years2
Div Non Decr Years3
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)-2.83%
PT rev (3m)-5.72%
EPS NQ rev (1m)-1.9%
EPS NQ rev (3m)-2.79%
EPS NY rev (1m)-0.92%
EPS NY rev (3m)-4.86%
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 | 14.03 | ||
| Fwd PE | 12.95 | ||
| P/S | 2.49 | ||
| P/FCF | 21.92 | ||
| P/OCF | 11.48 | ||
| P/B | 1.76 | ||
| P/tB | 11.76 | ||
| EV/EBITDA | 10.42 |
EPS(TTM)8.63
EY7.13%
EPS(NY)9.35
Fwd EY7.72%
FCF(TTM)5.52
FCFY4.56%
OCF(TTM)10.55
OCFY8.71%
SpS48.66
BVpS68.8
TBVpS10.3
PEG (NY)1.68
PEG (5Y)1.53
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 | 2.98 |
F-Score4
WACC6.84%
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%