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 is valued correctly, 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.
In the past 5 years MRK has always 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 5.71%, MRK is in line with its industry, outperforming 54.72% of the companies in the same industry.
MRK has a Return On Equity (9.45%) which is in line with its industry peers.
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 14.71%.
| 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 60.38% of its industry peers.
MRK's Profit Margin has improved in the last couple of years.
The Operating Margin of MRK (17.49%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of MRK has grown nicely.
With a Gross Margin value of 59.21%, MRK is not doing good in the industry: 64.15% of the companies in the same industry are doing better.
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so MRK is still creating some value.
Compared to 1 year ago, MRK has about the same amount of shares outstanding.
The number of shares outstanding for MRK remains at a similar level compared to 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.
The Altman-Z score of MRK (2.94) 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 comparable to the rest of the industry.
A Debt/Equity ratio of 0.23 indicates that MRK is not too dependend on debt financing.
MRK's Debt to Equity ratio of 0.23 is fine compared to the rest of the industry. MRK outperforms 69.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 4 | ||
| Altman-Z | 2.94 |
ROIC/WACC1.13
WACC6.6%
2.3 Liquidity
MRK has a Current Ratio of 1.31. 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 1.31 is in line compared to the rest of the industry. MRK outperforms 41.51% of its industry peers.
A Quick Ratio of 0.83 indicates that MRK may have some problems paying its short term obligations.
MRK has a worse Quick ratio (0.83) than 62.26% 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%.
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 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.
MRK is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.19% yearly.
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.
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
MRK is valuated correctly with a Price/Earnings ratio of 12.33.
71.70% of the companies in the same industry are more expensive than MRK, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of MRK to the average of the S&P500 Index (26.82), we can say MRK is valued rather cheaply.
A Price/Forward Earnings ratio of 10.47 indicates a reasonable valuation of MRK.
Based on the Price/Forward Earnings ratio, MRK is valued a bit cheaper than 69.81% of the companies in the same industry.
MRK is valuated cheaply when we compare the Price/Forward Earnings ratio to 36.21, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.33 | ||
| Fwd PE | 10.47 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MRK is valued a bit cheaper than 62.26% of the companies in the same industry.
MRK's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.47 | ||
| EV/EBITDA | 9.25 |
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)1.48
PEG (5Y)1.34
EPS Next 2Y8.91%
EPS Next 3Y7.86%
5. Dividend
5.1 Amount
MRK has a Yearly Dividend Yield of 1.94%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.03, MRK has a dividend in line with its industry peers.
MRK's Dividend Yield is comparable with the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.94% |
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
10.08% of the earnings are spent on dividend by MRK. This is a low number and 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 (8/1/2025, 7:00:00 PM)
107.15
-3.15 (-2.86%)
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 Cap46.59B
Analysts80
Price Target163.99 (53.05%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.94% |
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)0%
PT rev (3m)-7.32%
EPS NQ rev (1m)0.46%
EPS NQ rev (3m)-8.58%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)-0.28%
Revenue NQ rev (3m)-3.93%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.33 | ||
| Fwd PE | 10.47 | ||
| P/S | 2.19 | ||
| P/FCF | 21.47 | ||
| P/OCF | 11.34 | ||
| P/B | 1.56 | ||
| P/tB | 8.85 | ||
| EV/EBITDA | 9.25 |
EPS(TTM)8.69
EY8.11%
EPS(NY)10.24
Fwd EY9.55%
FCF(TTM)4.99
FCFY4.66%
OCF(TTM)9.45
OCFY8.82%
SpS49.03
BVpS68.59
TBVpS12.11
PEG (NY)1.48
PEG (5Y)1.34
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
WACC6.6%
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 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%