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

-0.06%

MRK

-0.2%

US Pharmaceuticals

1.0%

US Market


1 Year Return

21.4%

MRK

-6.0%

US Pharmaceuticals

6.7%

US Market

Return vs Industry: MRK exceeded the US Pharmaceuticals industry which returned -6% over the past year.

Return vs Market: MRK exceeded the US Market which returned 6.7% over the past year.


Share holder returns

MRKIndustryMarket
7 Day-0.06%-0.2%1.0%
30 Day2.1%-0.5%-1.8%
90 Day3.4%-2.6%-1.8%
1 Year24.7%21.4%-3.7%-6.0%9.1%6.7%
3 Year49.7%37.1%17.4%9.1%46.0%36.6%
5 Year81.8%56.0%28.0%14.5%66.9%48.6%

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?

20%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Undervalued: MRK ($84.34) is trading below our estimate of fair value ($104.93)

Significantly Undervalued: MRK is trading below fair value, but not by a significant amount.


Price Based on Earnings

PE vs Industry: MRK is poor value based on its PE Ratio (23.5x) compared to the Pharmaceuticals industry average (16.7x).

PE vs Market: MRK is poor value based on its PE Ratio (23.5x) compared to the US market (17.5x).


Price Based on Expected Growth

Low PEG Ratio: MRK is poor value based on its PEG Ratio (3.2x)


Price Based on Value of Assets

PB vs Industry: MRK is overvalued based on its PB Ratio (7.8x) compared to the US Pharmaceuticals industry average (2.8x).


Next Steps

Future Growth

How is Merck expected to perform in the next 1 to 3 years based on estimates from 15 analysts?

7.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: MRK's forecast earnings growth (7.3% per year) is above the savings rate (2.7%).

Earnings vs Market: MRK's earnings (7.3% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: MRK's earnings are forecast to grow, but not significantly.

Revenue vs Market: MRK's revenue (4.6% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: MRK's revenue (4.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Estimates


Future Return on Equity

High Future ROE: MRK's Return on Equity is forecast to be very high in 3 years time (47.4%).


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

Earnings Trend: MRK's earnings have declined by -13.1% per year over the past 5 years.

Accelerating Growth: MRK's earnings growth over the past year (598.1%) exceeds its 5-year average (-13.1% per year).

Earnings vs Industry: MRK earnings growth over the past year (598.1%) exceeded the Pharmaceuticals industry 24.3%.


Return on Equity

High ROE: MRK's Return on Equity (33.3%) is considered high.


Return on Assets

ROA vs Industry: MRK has a higher Return on Assets than the Pharmaceuticals industry average last year.


Return on Capital Employed

ROCE Improving: MRK has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Merck's financial position?


Financial Position Analysis

Short Term Liabilities: MRK's short term assets ($24.3B) exceeds its short term liabilities ($20.1B)

Long Term Liabilities: MRK's short term assets ($24.3B) do not cover its long term liabilities ($36.1B)


Debt to Equity History and Analysis

Debt Level: MRK's debt to equity ratio (95.9%) is considered high

Reducing Debt: MRK's debt to equity ratio has increased from 47.7% to 95.9% over the past 5 years.

Debt Coverage: MRK's debt is well covered by operating cash flow (40.6%).

Interest Coverage: MRK's interest payments on its debt are well covered by EBIT (27.1x coverage).


Balance Sheet

Inventory Level: MRK has a high level of physical assets or inventory.

Debt Coverage by Assets: MRK's 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?

2.89%

Expected Dividend Yield


Dividend Yield vs Market

company2.6%marketbottom25%1.5%markettop25%3.8%industryaverage2.3%forecastin3Years2.9%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: MRK's dividend (2.61%) is higher than the bottom 25% of dividend payers in the US market (1.46%).

High Dividend: MRK's dividend (2.61%) is low compared to the top 25% of dividend payers in the US market (3.77%).

Stable Dividend: MRK's dividends per share have been stable in the past 10 years.

Growing Dividend: MRK's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (57.4%), MRK's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MRK's dividends in 3 years are forecast to be well covered by earnings (41.5% payout ratio).


Next Steps

Management

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

5.0yrs

Average management tenure


CEO

Ken Frazier (64yo)

8.8yrs

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

Compensation vs. Market: Ken's total compensation ($USD20.93M) is about average for companies of similar size in the US market ($USD11.20M).

Compensation vs Earnings: Ken's compensation has been consistent with company performance over the past year.


Management Age and Tenure

5.0yrs

Average Tenure

54yo

Average Age

Experienced Management: MRK's management team is seasoned and experienced (5 years average tenure).


Board Age and Tenure

11.9yrs

Average Tenure

65.5yo

Average Age

Experienced Board: MRK's board of directors are seasoned and experienced ( 11.9 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown


Management Team

  • Ken Frazier (64yo)

    Chairman

    • Tenure: 8.8yrs
    • Compensation: US$20.93m
  • Roger Perlmutter (67yo)

    Executive VP & President of Merck Research Laboratories

    • Tenure: 6.5yrs
    • Compensation: US$7.10m
  • Adele Ambrose (62yo)

    Chief Communications Officer and Senior Vice President

    • Tenure: 9.9yrs
  • Rob Davis (52yo)

    Executive VP of Global Services & CFO

    • Tenure: 5.5yrs
    • Compensation: US$6.62m
  • Peter Dannenbaum

    Vice President of Investor Relations

    • Tenure: 0.2yrs
  • Adam Schechter (54yo)

    Special Advisor

    • Tenure: 9.4yrs
    • Compensation: US$6.51m
  • Mike Nally (43yo)

    Chief Marketing Officer & Executive VP

    • Tenure: 0.8yrs
  • Jim Scholefield (57yo)

    Executive VP and Chief Information & Digital Officer

    • Tenure: 1yrs
  • Ashley Watson (50yo)

    Senior VP and Chief Ethics & Compliance Officer

    • Tenure: 4.6yrs
  • Jennifer Zachary (41yo)

    Executive VP & General Counsel

    • Tenure: 1.5yrs
    • Compensation: US$5.19m

Board Members

  • Peter Wendell (68yo)

    Independent Director

    • Tenure: 16.1yrs
    • Compensation: US$360.00k
  • Pam Craig (62yo)

    Independent Director

    • Tenure: 4.1yrs
    • Compensation: US$355.00k
  • Wendell Weeks (59yo)

    Independent Director

    • Tenure: 15.7yrs
    • Compensation: US$360.00k
  • Pat Russo (67yo)

    Independent Director

    • Tenure: 24.1yrs
    • Compensation: US$330.00k
  • Ken Frazier (64yo)

    Chairman

    • Tenure: 8.8yrs
    • Compensation: US$20.93m
  • Tom Glocer (60yo)

    Independent Director

    • Tenure: 11.9yrs
    • Compensation: US$320.00k
  • Shelly Lazarus (71yo)

    Independent Director

    • Tenure: 15yrs
    • Compensation: US$360.00k
  • Les Brun (67yo)

    Lead Independent Director

    • Tenure: 0yrs
    • Compensation: US$360.00k
  • Tom Cech (72yo)

    Independent Director

    • Tenure: 10.4yrs
    • Compensation: US$347.78k
  • Paul Rothman (61yo)

    Independent Director

    • Tenure: 4.1yrs
    • 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$215.942b
  • 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
MRKSWX (SIX Swiss Exchange)YesCommon StockCHCHFJan 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
MRKSNSE (Santiago Stock Exchange)YesCommon StockCLUSDJan 1968
0QAHLSE (London Stock Exchange)YesCommon StockGBEURJan 1968
6MKXTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1968
MRKWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1968
MRKBASE (Buenos Aires Stock Exchange)CEDEAR (5 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 in Pharmaceutical, Animal Health, Healthcare Services, and Alliances segments. The company offers therapeutic and preventive agents to ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 01:28
End of Day Share Price2019/10/11 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.

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