MERCK KGAA (MRK.DE) Stock Fundamental Analysis
FRA:MRK - Deutsche Boerse Ag - DE0006599905 - Common Stock - Currency: EUR
Overall MRK gets a fundamental rating of 4 out of 10. We evaluated MRK against 53 industry peers in the Pharmaceuticals industry. MRK has an average financial health and profitability rating. MRK has a correct valuation and a medium growth rate.
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.
MRK had positive earnings in each of the past 5 years.
MRK had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
MRK has a Return On Assets of 5.71%. This is comparable to the rest of the industry: MRK outperforms 52.83% of its industry peers.
The Return On Equity of MRK (9.45%) is comparable to the rest of the industry.
MRK's Return On Invested Capital of 7.49% is in line compared to the rest of the industry. MRK outperforms 50.94% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MRK is significantly below the industry average of 15.44%.
| 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 66.04% of its industry peers.
In the last couple of years the Profit Margin of MRK has grown nicely.
MRK's Operating Margin of 17.49% is in line compared to the rest of the industry. MRK outperforms 47.17% of its industry peers.
In the last couple of years the Operating Margin of MRK has grown nicely.
Looking at the Gross Margin, with a value of 59.21%, MRK is doing worse than 69.81% of the companies in the same industry.
MRK's Gross Margin has been stable in the last couple of years.
| 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
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.
MRK has about the same amout of shares outstanding than it did 5 years ago.
The debt/assets ratio for MRK has been reduced compared to a year ago.
2.2 Solvency
MRK has an Altman-Z score of 3.01. This indicates that MRK is financially healthy and has little risk of bankruptcy at the moment.
MRK has a Altman-Z score (3.01) which is comparable to the rest of the industry.
MRK has a debt to FCF ratio of 4.00. This is a neutral value as MRK would need 4.00 years to pay back of all of its debts.
MRK has a Debt to FCF ratio of 4.00. This is comparable to the rest of the industry: MRK outperforms 56.60% of 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 better Debt to Equity ratio (0.23) than 71.70% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 4 | ||
| Altman-Z | 3.01 |
ROIC/WACC1.13
WACC6.63%
2.3 Liquidity
A Current Ratio of 1.31 indicates that MRK should not have too much problems paying its short term obligations.
MRK's Current ratio of 1.31 is on the low side compared to the rest of the industry. MRK is outperformed by 60.38% of its industry peers.
MRK has a Quick Ratio of 1.31. This is a bad value and indicates that MRK is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of MRK (0.83) is worse than 66.04% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.31 | ||
| Quick Ratio | 0.83 |
3. Growth
3.1 Past
MRK shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.23%.
The Earnings Per Share has been growing by 9.19% on average over the past years. This is quite good.
The Revenue has been growing slightly by 2.38% in the past year.
The Revenue has been growing slightly by 5.55% on average over the past years.
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
Based on estimates for the next years, MRK will show a small growth in Earnings Per Share. The EPS will grow by 7.50% on average per year.
Based on estimates for the next years, MRK will show a small growth in Revenue. The Revenue will grow by 4.14% on average per year.
EPS Next Y8.35%
EPS Next 2Y8.91%
EPS Next 3Y7.86%
EPS Next 5Y7.5%
Revenue Next Year2.85%
Revenue Next 2Y3.29%
Revenue Next 3Y3.5%
Revenue Next 5Y4.14%
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 stable.
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
A Price/Earnings ratio of 13.29 indicates a correct valuation of MRK.
69.81% of the companies in the same industry are more expensive than MRK, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 26.25, MRK is valued a bit cheaper.
MRK is valuated reasonably with a Price/Forward Earnings ratio of 11.28.
71.70% of the companies in the same industry are more expensive than MRK, based on the Price/Forward Earnings ratio.
MRK's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.15.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.29 | ||
| Fwd PE | 11.28 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MRK is valued a bit cheaper than the industry average as 69.81% of the companies are valued more expensively.
MRK's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.14 | ||
| EV/EBITDA | 9.61 |
4.3 Compensation for Growth
MRK's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.59
PEG (5Y)1.45
EPS Next 2Y8.91%
EPS Next 3Y7.86%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.87%, MRK has a reasonable but not impressive dividend return.
MRK's Dividend Yield is comparable with the industry average which is at 3.05.
MRK's Dividend Yield is slightly below the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.87% |
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 Years2
Div Non Decr Years3
5.3 Sustainability
10.08% of the earnings are spent on dividend by MRK. This is a low number and sustainable payout ratio.
MRK's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP10.08%
EPS Next 2Y8.91%
EPS Next 3Y7.86%
FRA:MRK (5/30/2025, 7:00:00 PM)
115.5
+0.25 (+0.22%)
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 Cap50.22B
Analysts80
Price Target172.02 (48.94%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.87% |
Yearly Dividend0.65
Dividend Growth(5Y)11.88%
DP10.08%
Div Incr Years2
Div Non Decr Years3
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)-5.47%
PT rev (3m)-6.98%
EPS NQ rev (1m)-9%
EPS NQ rev (3m)-10.37%
EPS NY rev (1m)0%
EPS NY rev (3m)-3.43%
Revenue NQ rev (1m)-3.67%
Revenue NQ rev (3m)-3.18%
Revenue NY rev (1m)-1.11%
Revenue NY rev (3m)-1.76%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.29 | ||
| Fwd PE | 11.28 | ||
| P/S | 2.36 | ||
| P/FCF | 23.14 | ||
| P/OCF | 12.23 | ||
| P/B | 1.68 | ||
| P/tB | 9.54 | ||
| EV/EBITDA | 9.61 |
EPS(TTM)8.69
EY7.52%
EPS(NY)10.24
Fwd EY8.86%
FCF(TTM)4.99
FCFY4.32%
OCF(TTM)9.45
OCFY8.18%
SpS49.03
BVpS68.59
TBVpS12.11
PEG (NY)1.59
PEG (5Y)1.45
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 | 3.01 |
F-Score8
WACC6.63%
ROIC/WACC1.13
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 5Y7.5%
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 5Y4.14%
EBIT growth 1Y4.98%
EBIT growth 3Y-0.01%
EBIT growth 5Y11.7%
EBIT Next Year40.77%
EBIT Next 3Y16.3%
EBIT Next 5Y12.45%
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%