MERCK KGAA (MRK.DE) Stock Fundamental Analysis
FRA:MRK - Deutsche Boerse Ag - DE0006599905 - Common Stock - Currency: EUR
MRK gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 50 industry peers in the Pharmaceuticals industry. MRK has only an average score on both its financial health and profitability. MRK has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
MRK had positive earnings in the past year.
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
With a Return On Assets value of 5.71%, MRK perfoms like the industry average, outperforming 56.00% of the companies in the same industry.
MRK has a Return On Equity (9.45%) which is in line with its industry peers.
MRK has a Return On Invested Capital (7.49%) 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 14.75%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.71% | ||
| ROE | 9.45% | ||
| ROIC | 7.49% |
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
MRK's Profit Margin of 13.22% is fine compared to the rest of the industry. MRK outperforms 62.00% of its industry peers.
MRK's Profit Margin has improved in the last couple of years.
With a Operating Margin value of 17.49%, MRK perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
MRK's Operating Margin has improved in the last couple of years.
With a Gross Margin value of 59.21%, MRK is not doing good in the industry: 66.00% of the companies in the same industry are doing better.
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 | 17.49% | ||
| PM (TTM) | 13.22% | ||
| GM | 59.21% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), MRK is creating some value.
The number of shares outstanding for MRK remains at a similar level compared to 1 year ago.
MRK has about the same amout of shares outstanding than it did 5 years ago.
MRK has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.94 indicates that MRK is not a great score, but indicates only limited risk for bankruptcy at the moment.
MRK has a Altman-Z score (2.94) which is comparable to the rest of the industry.
The Debt to FCF ratio of MRK is 4.00, which is a neutral value as it means it would take MRK, 4.00 years of fcf income to pay off all of its debts.
MRK has a Debt to FCF ratio (4.00) which is in line with its industry peers.
MRK has a Debt/Equity ratio of 0.23. This is a healthy value indicating a solid balance between debt and equity.
MRK has a Debt to Equity ratio of 0.23. This is in the better half of the industry: MRK outperforms 70.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 4 | ||
| Altman-Z | 2.94 |
ROIC/WACC1.12
WACC6.66%
2.3 Liquidity
A Current Ratio of 1.31 indicates that MRK should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.31, MRK is in line with its industry, outperforming 42.00% of the companies in the same industry.
A Quick Ratio of 0.83 indicates that MRK may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.83, MRK is doing worse than 64.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.31 | ||
| Quick Ratio | 0.83 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.23% over the past year.
The Earnings Per Share has been growing by 9.19% on average over the past years. This is quite good.
MRK shows a small growth in Revenue. In the last year, the Revenue has grown by 2.38%.
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)6.23%
EPS 3Y-0.35%
EPS 5Y9.19%
EPS Q2Q%2.91%
Revenue 1Y (TTM)2.38%
Revenue growth 3Y2.43%
Revenue growth 5Y5.55%
Sales Q2Q%3.13%
3.2 Future
MRK is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.71% yearly.
The Revenue is expected to grow by 3.19% on average over the next years.
EPS Next Y8.35%
EPS Next 2Y8.91%
EPS Next 3Y7.86%
EPS Next 5Y5.71%
Revenue Next Year2.85%
Revenue Next 2Y3.29%
Revenue Next 3Y3.5%
Revenue Next 5Y3.19%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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
With a Price/Earnings ratio of 12.69, MRK is valued correctly.
MRK's Price/Earnings ratio is a bit cheaper when compared to the industry. MRK is cheaper than 72.00% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.15, MRK is valued rather cheaply.
With a Price/Forward Earnings ratio of 10.77, the valuation of MRK can be described as very reasonable.
MRK's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. MRK is cheaper than 72.00% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of MRK to the average of the S&P500 Index (21.60), we can say MRK is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.69 | ||
| Fwd PE | 10.77 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MRK indicates a somewhat cheap valuation: MRK is cheaper than 66.00% of the companies listed in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as MRK.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.1 | ||
| EV/EBITDA | 9.23 |
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)1.52
PEG (5Y)1.38
EPS Next 2Y8.91%
EPS Next 3Y7.86%
5. Dividend
5.1 Amount
MRK has a Yearly Dividend Yield of 1.97%.
Compared to an average industry Dividend Yield of 3.03, MRK has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.42, MRK has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.97% |
5.2 History
The dividend of MRK is nicely growing with an annual growth rate of 11.88%!
Dividend Growth(5Y)11.88%
Div Incr Years0
Div Non Decr Years4
5.3 Sustainability
MRK pays out 10.08% of its income as dividend. This is a sustainable payout ratio.
The dividend of MRK is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP10.08%
EPS Next 2Y8.91%
EPS Next 3Y7.86%
FRA:MRK (7/1/2025, 3:43:09 PM)
110.3
+0.3 (+0.27%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryPharmaceuticals
Earnings (Last)
Earnings (Next)
Inst Owners48.59%
Inst Owner ChangeN/A
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap47.96B
Analysts80
Price Target163.99 (48.68%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.97% |
Yearly Dividend0.65
Dividend Growth(5Y)11.88%
DP10.08%
Div Incr Years0
Div Non Decr Years4
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-3%
Min EPS beat(2)-3.43%
Max EPS beat(2)-2.56%
EPS beat(4)1
Avg EPS beat(4)1.06%
Min EPS beat(4)-3.43%
Max EPS beat(4)10.63%
EPS beat(8)3
Avg EPS beat(8)1.42%
EPS beat(12)5
Avg EPS beat(12)0.55%
EPS beat(16)7
Avg EPS beat(16)0.51%
Revenue beat(2)0
Avg Revenue beat(2)-1%
Min Revenue beat(2)-1.33%
Max Revenue beat(2)-0.68%
Revenue beat(4)1
Avg Revenue beat(4)-0.96%
Min Revenue beat(4)-2.1%
Max Revenue beat(4)0.28%
Revenue beat(8)1
Avg Revenue beat(8)-1.22%
Revenue beat(12)3
Avg Revenue beat(12)-0.96%
Revenue beat(16)4
Avg Revenue beat(16)-0.81%
PT rev (1m)-4.67%
PT rev (3m)-9.94%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-9%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.92%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.67%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.87%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.69 | ||
| Fwd PE | 10.77 | ||
| P/S | 2.25 | ||
| P/FCF | 22.1 | ||
| P/OCF | 11.68 | ||
| P/B | 1.61 | ||
| P/tB | 9.11 | ||
| EV/EBITDA | 9.23 |
EPS(TTM)8.69
EY7.88%
EPS(NY)10.24
Fwd EY9.28%
FCF(TTM)4.99
FCFY4.52%
OCF(TTM)9.45
OCFY8.56%
SpS49.03
BVpS68.59
TBVpS12.11
PEG (NY)1.52
PEG (5Y)1.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.71% | ||
| ROE | 9.45% | ||
| ROCE | 9.35% | ||
| ROIC | 7.49% | ||
| ROICexc | 7.8% | ||
| ROICexgc | 21.8% | ||
| OM | 17.49% | ||
| PM (TTM) | 13.22% | ||
| GM | 59.21% | ||
| FCFM | 10.18% |
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-Score8
Asset Turnover0.43
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 4 | ||
| Debt/EBITDA | 1.18 | ||
| Cap/Depr | 89.97% | ||
| Cap/Sales | 9.09% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 69.82% | ||
| Profit Quality | 77.03% | ||
| Current Ratio | 1.31 | ||
| Quick Ratio | 0.83 | ||
| Altman-Z | 2.94 |
F-Score8
WACC6.66%
ROIC/WACC1.12
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)6.23%
EPS 3Y-0.35%
EPS 5Y9.19%
EPS Q2Q%2.91%
EPS Next Y8.35%
EPS Next 2Y8.91%
EPS Next 3Y7.86%
EPS Next 5Y5.71%
Revenue 1Y (TTM)2.38%
Revenue growth 3Y2.43%
Revenue growth 5Y5.55%
Sales Q2Q%3.13%
Revenue Next Year2.85%
Revenue Next 2Y3.29%
Revenue Next 3Y3.5%
Revenue Next 5Y3.19%
EBIT growth 1Y4.98%
EBIT growth 3Y-0.01%
EBIT growth 5Y11.7%
EBIT Next Year40.77%
EBIT Next 3Y16.3%
EBIT Next 5Y10.96%
FCF growth 1Y-6.18%
FCF growth 3Y-9.07%
FCF growth 5Y5.53%
OCF growth 1Y-3.86%
OCF growth 3Y-0.22%
OCF growth 5Y9.93%