NYSE:MRK

Stock Analysis Report

Executive Summary

Merck & Co., Inc. provides healthcare solutions worldwide.

Snowflake

Fundamentals

Solid track record established dividend payer.


Similar Companies

Share Price & News

How has Merck's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-0.5%

NYSE:MRK

-0.05%

US Pharmaceuticals

0.9%

US Market


1 Year Return

23.8%

NYSE:MRK

-6.7%

US Pharmaceuticals

0.3%

US Market

MRK outperformed the Pharmaceuticals industry which returned -6.7% over the past year.

MRK outperformed the Market in United States of America which returned 0.3% over the past year.


Share holder returns

MRKIndustryMarket
7 Day-0.5%-0.05%0.9%
30 Day5.2%-1.4%-1.9%
90 Day5.8%-3.1%1.6%
1 Year27.2%23.8%-4.4%-6.7%2.6%0.3%
3 Year47.2%34.7%9.4%2.0%41.0%31.8%
5 Year65.8%42.3%24.0%10.9%55.2%38.0%

Price Volatility Vs. Market

How volatile is Merck's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Merck undervalued based on future cash flows and its price relative to the stock market?

14%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Merck's share price is below the future cash flow value, but not at a moderate discount (< 20%).

Merck's share price is below the future cash flow value, but not at a substantial discount (< 40%).


Price Based on Earnings

Merck is overvalued based on earnings compared to the US Pharmaceuticals industry average.

Merck is overvalued based on earnings compared to the United States of America market.


Price Based on Expected Growth

Merck is poor value based on expected growth next year.


Price Based on Value of Assets

Merck is overvalued based on assets compared to the US Pharmaceuticals industry average.


Next Steps

Future Growth

How is Merck expected to perform in the next 1 to 3 years based on estimates from 14 analysts?

9.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Merck's revenue is expected to grow by 4.5% yearly, however this is not considered high growth (20% yearly).

Merck's earnings are expected to grow by 9.2% yearly, however this is not considered high growth (20% yearly).

Merck's revenue growth is positive but not above the United States of America market average.

Merck's earnings growth is positive but not above the United States of America market average.

Merck's earnings growth is expected to exceed the low risk savings rate of 2.7%.


Earnings per Share Growth Estimates


Future Return on Equity

Merck is expected to make outstanding use of shareholders’ funds in the future (Return on Equity greater than 40%).


Next Steps

Past Performance

How has Merck performed over the past 5 years?

-13.1%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Merck's year on year earnings growth rate was negative over the past 5 years, however the most recent earnings are above average.

Merck's 1-year earnings growth exceeds its 5-year average (598.1% vs -13.1%)

Merck's earnings growth has exceeded the US Pharmaceuticals industry average in the past year (598.1% vs 24.3%).


Return on Equity

Merck has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).


Return on Assets

Merck used its assets more efficiently than the US Pharmaceuticals industry average last year based on Return on Assets.


Return on Capital Employed

Merck has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Merck's financial position?


Financial Position Analysis

Merck is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

Merck's long term commitments exceed its cash and other short term assets.


Debt to Equity History and Analysis

Merck's level of debt (95.9%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has increased over the past 5 years (47.7% vs 95.9% today).

Debt is well covered by operating cash flow (40.6%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 27.1x coverage).


Balance Sheet

High level of physical assets or inventory.

Debt is not covered by short term assets, assets are 0.9x debt.


Next Steps

Dividend

What is Merck's current dividend yield, its reliability and sustainability?

2.76%

Expected Dividend Yield


Upcoming Dividend Payment

Purchase Merck before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield and Payments Analysis

Merck's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.48%).

Merck's dividend is below the markets top 25% of dividend payers in United States of America (3.83%).

Dividends per share have been stable in the past 10 years.

Dividends per share have increased over the past 10 years.


Current Payout to Shareholders

Dividends paid are covered by earnings (1.7x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be well covered by earnings (2.5x coverage).


Next Steps

Management

What is the CEO of Merck's salary, the management and board of directors tenure and is there insider trading?

5.4yrs

Average management tenure


CEO

Ken Frazier (64yo)

8.6yrs

Tenure

US$20,934,504

Compensation

Mr. Kenneth C. Frazier, also known as Ken, has been the President of Merck & Co., Inc. since May 01, 2010 and has also been its Chief Executive Officer since January 1, 2011. He also serves as the Chief Ex ...


CEO Compensation Analysis

Ken's remuneration is higher than average for companies of similar size in United States of America.

Ken's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

5.4yrs

Average Tenure

55yo

Average Age

The average tenure for the Merck management team is over 5 years, this suggests they are a seasoned and experienced team.


Board Age and Tenure

11.8yrs

Average Tenure

65.5yo

Average Age

The average tenure for the Merck board of directors is over 10 years, this suggests they are a seasoned and experienced board.


Insider Trading

No 3 month open market individual insider trading information.


Ownership Breakdown


Management Team

  • Ken Frazier (64yo)

    Chairman

    • Tenure: 8.6yrs
    • Compensation: US$20.93m
  • Roger Perlmutter (67yo)

    Executive VP & President of Merck Research Laboratories

    • Tenure: 6.3yrs
    • Compensation: US$7.10m
  • Adele Ambrose (62yo)

    Chief Communications Officer and Senior Vice President

    • Tenure: 9.8yrs
  • Rob Davis (52yo)

    Executive VP of Global Services & CFO

    • Tenure: 5.3yrs
    • Compensation: US$6.62m
  • Peter Dannenbaum

    Vice President of Investor Relations

    • Tenure: 0.0yrs
  • Adam Schechter (54yo)

    Special Advisor

    • Tenure: 9.3yrs
    • Compensation: US$6.51m
  • Rita Karachun (55yo)

    Senior VP of Finance & Global Controller

    • Tenure: 5.4yrs
  • Jim Scholefield (57yo)

    Executive VP and Chief Information & Digital Officer

    • Tenure: 0.8yrs
  • Ashley Watson (50yo)

    Senior VP and Chief Ethics & Compliance Officer

    • Tenure: 4.4yrs
  • Jennifer Zachary (41yo)

    Executive VP & General Counsel

    • Tenure: 1.3yrs
    • Compensation: US$5.19m

Board Members

  • Peter Wendell (68yo)

    Independent Director

    • Tenure: 15.9yrs
    • Compensation: US$360.00k
  • Pam Craig (62yo)

    Independent Director

    • Tenure: 3.9yrs
    • Compensation: US$355.00k
  • Wendell Weeks (59yo)

    Independent Director

    • Tenure: 15.5yrs
    • Compensation: US$360.00k
  • Pat Russo (67yo)

    Independent Director

    • Tenure: 23.9yrs
    • Compensation: US$330.00k
  • Ken Frazier (64yo)

    Chairman

    • Tenure: 8.6yrs
    • Compensation: US$20.93m
  • Tom Glocer (60yo)

    Independent Director

    • Tenure: 11.8yrs
    • Compensation: US$320.00k
  • Shelly Lazarus (71yo)

    Independent Director

    • Tenure: 14.8yrs
    • Compensation: US$360.00k
  • Les Brun (67yo)

    Lead Independent Director

    • Tenure: 0.0yrs
    • Compensation: US$360.00k
  • Tom Cech (72yo)

    Independent Director

    • Tenure: 10.3yrs
    • Compensation: US$347.78k
  • Paul Rothman (61yo)

    Independent Director

    • Tenure: 3.9yrs
    • Compensation: US$355.00k

Company Information

Merck & Co., Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Merck & Co., Inc.
  • Ticker: MRK
  • Exchange: NYSE
  • Founded: 1891
  • Industry: Pharmaceuticals
  • Sector: Pharmaceuticals & Biotech
  • Market Cap: US$219.296b
  • Shares outstanding: 2.56b
  • Website: https://www.merck.com

Number of Employees


Location

  • Merck & Co., Inc.
  • 2000 Galloping Hill Road
  • Kenilworth
  • New Jersey
  • 7033
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
0QAHLSE (London Stock Exchange)YesCommon StockGBEURJan 1968
MRKNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
MRK *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
MRKENXTPA (Euronext Paris)YesCommon StockFREURJan 1968
6MKDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
MRKSWX (SIX Swiss Exchange)YesCommon StockCHCHFJan 1968
MRK-UETLX (Eurotlx)YesCommon StockITEURJan 1968
6MKXTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1968
MRKSNSE (Santiago Stock Exchange)YesCommon StockCLUSDJan 1968
MRKWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1968
MRKBASE (Buenos Aires Stock Exchange)CEDEAR (10 REP 1 USD0.50)ARARSMar 2000
MRCK34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COM SHBRBRLDec 2011

Biography

Merck & Co., Inc. provides healthcare solutions worldwide. It operates through four segments: Pharmaceutical, Animal Health, Healthcare Services, and Alliances. The company offers therapeutic and preventiv ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/08/20 23:43
End of Day Share Price2019/08/20 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.