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Merck

NYSE:MRK
Snowflake Description

Solid track record established dividend payer.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
MRK
NYSE
$209B
Market Cap
  1. Home
  2. US
  3. Pharmaceuticals & Biotech
Company description

Merck & Co., Inc. provides healthcare solutions worldwide. The last earnings update was 75 days ago. More info.


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MRK Share Price and Events
7 Day Returns
0.3%
NYSE:MRK
-1.4%
US Pharmaceuticals
-1.2%
US Market
1 Year Returns
29.5%
NYSE:MRK
3.6%
US Pharmaceuticals
3.3%
US Market
MRK Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Merck (MRK) 0.3% -4% 8.9% 29.5% 38.7% 40.1%
US Pharmaceuticals -1.4% -4.4% -0.5% 3.6% 0.3% 12.3%
US Market -1.2% 0.8% 0.9% 3.3% 35.9% 41.7%
1 Year Return vs Industry and Market
  • MRK outperformed the Pharmaceuticals industry which returned 3.6% over the past year.
  • MRK outperformed the Market in United States of America which returned 3.3% over the past year.
Price Volatility
MRK
Industry
5yr Volatility vs Market

MRK Value

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

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Merck to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Merck.

NYSE:MRK Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 14 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 7.9%
Perpetual Growth Rate 10-Year US Government Bond Rate 2.7%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NYSE:MRK
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 2.7%
Equity Risk Premium S&P Global 6%
Pharmaceuticals Unlevered Beta Simply Wall St/ S&P Global 0.73
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.732 (1 + (1- 21%) (12.9%))
0.871
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
0.87
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.73% + (0.871 * 5.96%)
7.92%

Discounted Cash Flow Calculation for NYSE:MRK using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Merck is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

NYSE:MRK DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (USD, Millions) Source Present Value
Discounted (@ 7.92%)
2020 12,194.35 Analyst x5 11,299.53
2021 13,496.75 Analyst x4 11,588.65
2022 14,501.50 Analyst x2 11,537.68
2023 15,874.00 Analyst x2 11,702.91
2024 16,959.42 Est @ 6.84% 11,585.65
2025 17,910.06 Est @ 5.61% 11,337.26
2026 18,759.49 Est @ 4.74% 11,003.58
2027 19,535.93 Est @ 4.14% 10,618.16
2028 20,261.94 Est @ 3.72% 10,204.64
2029 20,954.97 Est @ 3.42% 9,779.26
Present value of next 10 years cash flows $110,657.33
NYSE:MRK DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2029 × (1 + g) ÷ (Discount Rate – g)
= $20,954.97 × (1 + 2.73%) ÷ (7.92% – 2.73%)
$414,855.03
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= $414,855.03 ÷ (1 + 7.92%)10
$193,604.37
NYSE:MRK Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= $110,657.33 + $193,604.37
$304,261.69
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $304,261.69 / 2,574.64
$118.18
NYSE:MRK Discount to Share Price
Calculation Result
Value per share (USD) From above. $118.18
Current discount Discount to share price of $81.21
= -1 x ($81.21 - $118.18) / $118.18
31.3%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

Current Discount
Amount off the current price Merck is available for.
Intrinsic value
31%
Share price is $81.21 vs Future cash flow value of $118.18
Current Discount Checks
For Merck to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • Merck's share price is below the future cash flow value, and at a moderate discount (> 20%).
  • Merck's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Merck's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Merck's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NYSE:MRK PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-03-31) in USD $3.19
NYSE:MRK Share Price ** NYSE (2019-07-22) in USD $81.21
United States of America Pharmaceuticals Industry PE Ratio Median Figure of 29 Publicly-Listed Pharmaceuticals Companies 17.84x
United States of America Market PE Ratio Median Figure of 3,082 Publicly-Listed Companies 17.86x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Merck.

NYSE:MRK PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NYSE:MRK Share Price ÷ EPS (both in USD)

= 81.21 ÷ 3.19

25.49x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • 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
Does Merck's expected growth come at a high price?
Raw Data
NYSE:MRK PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 25.49x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 14 Analysts
11.4%per year
United States of America Pharmaceuticals Industry PEG Ratio Median Figure of 21 Publicly-Listed Pharmaceuticals Companies 1.7x
United States of America Market PEG Ratio Median Figure of 2,119 Publicly-Listed Companies 1.57x

*Line of best fit is calculated by linear regression .

NYSE:MRK PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 25.49x ÷ 11.4%

2.23x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Merck is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Merck's assets?
Raw Data
NYSE:MRK PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-03-31) in USD $10.66
NYSE:MRK Share Price * NYSE (2019-07-22) in USD $81.21
United States of America Pharmaceuticals Industry PB Ratio Median Figure of 186 Publicly-Listed Pharmaceuticals Companies 3.1x
United States of America Market PB Ratio Median Figure of 5,248 Publicly-Listed Companies 1.79x
NYSE:MRK PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NYSE:MRK Share Price ÷ Book Value per Share (both in USD)

= 81.21 ÷ 10.66

7.62x

* Primary Listing of Merck.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Merck is overvalued based on assets compared to the US Pharmaceuticals industry average.
X
Value checks
We assess Merck's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Pharmaceuticals industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Pharmaceuticals industry average (and greater than 0)? (1 check)
  5. Merck has a total score of 1/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

MRK Future Performance

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

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
11.4%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Merck expected to grow at an attractive rate?
  • Merck's earnings growth is expected to exceed the low risk savings rate of 2.7%.
Growth vs Market Checks
  • Merck's earnings growth is positive but not above the United States of America market average.
  • Merck's revenue growth is positive but not above the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NYSE:MRK Future Growth Rates Data Sources
Data Point Source Value (per year)
NYSE:MRK Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 14 Analysts 11.4%
NYSE:MRK Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 14 Analysts 4.6%
United States of America Pharmaceuticals Industry Earnings Growth Rate Market Cap Weighted Average 16.2%
United States of America Pharmaceuticals Industry Revenue Growth Rate Market Cap Weighted Average 5.2%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 14%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7.4%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NYSE:MRK Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 14 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NYSE:MRK Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2023-12-31 53,043 16,330 15,473 7
2022-12-31 52,436 16,525 15,256 7
2021-12-31 50,069 15,761 13,917 11
2020-12-31 47,362 14,831 12,379 14
2019-12-31 44,670 13,200 10,053 13
NYSE:MRK Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2019-03-31 43,073 11,103 8,399
2018-12-31 42,294 10,922 6,220
2018-09-30 41,729 11,345 3,347
2018-06-30 41,259 7,381 1,341
2018-03-31 40,725 7,320 1,579
2017-12-31 40,122 6,451 2,394
2017-09-30 39,804 6,064 2,845
2017-06-30 40,016 10,206 5,086
2017-03-31 39,929 8,489 4,346
2016-12-31 39,807 10,376 3,920
2016-09-30 39,907 10,990 5,492
2016-06-30 39,444 11,330 5,133

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Merck's earnings are expected to grow by 11.4% yearly, however this is not considered high growth (20% yearly).
  • Merck's revenue is expected to grow by 4.6% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NYSE:MRK Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 14 Analyst Estimates (S&P Global) See Below

All data from Merck Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:MRK Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2023-12-31 6.64 6.64 6.64 1.00
2022-12-31 6.56 6.56 6.56 1.00
2021-12-31 5.73 5.92 5.53 2.00
2020-12-31 4.93 5.24 4.81 4.00
2019-12-31 4.02 4.21 3.80 3.00
NYSE:MRK Past Financials Data
Date (Data in USD Millions) EPS *
2019-03-31 3.19
2018-12-31 2.33
2018-09-30 1.24
2018-06-30 0.50
2018-03-31 0.58
2017-12-31 0.88
2017-09-30 1.04
2017-06-30 1.85
2017-03-31 1.58
2016-12-31 1.42
2016-09-30 1.98
2016-06-30 1.84

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Merck is expected to make outstanding use of shareholders’ funds in the future (Return on Equity greater than 40%).
X
Future performance checks
We assess Merck's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Merck has a total score of 2/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

MRK Past Performance

  How has Merck performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Merck's growth in the last year to its industry (Pharmaceuticals).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • 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 (431.9% vs -15.9%)
  • Merck's earnings growth has exceeded the US Pharmaceuticals industry average in the past year (431.9% vs 40.4%).
Earnings and Revenue History
Merck's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Merck Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:MRK Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-03-31 43,073.00 8,399.00 9,467.00 8,428.00
2018-12-31 42,294.00 6,220.00 9,555.00 9,652.00
2018-09-30 41,729.00 3,347.00 9,809.00 9,120.00
2018-06-30 41,259.00 1,341.00 9,829.00 11,205.00
2018-03-31 40,725.00 1,579.00 9,449.00 11,182.00
2017-12-31 40,122.00 2,394.00 9,516.00 9,818.00
2017-09-30 39,804.00 2,845.00 9,615.00 9,427.00
2017-06-30 40,016.00 5,086.00 9,872.00 6,916.00
2017-03-31 39,929.00 4,346.00 9,713.00 7,035.00
2016-12-31 39,807.00 3,920.00 9,313.00 6,921.00
2016-09-30 39,907.00 5,492.00 9,193.00 6,849.00
2016-06-30 39,444.00 5,133.00 9,312.00 6,828.00
2016-03-31 39,385.00 4,614.00 9,776.00 6,518.00
2015-12-31 39,498.00 4,442.00 9,799.00 6,613.00
2015-09-30 39,765.00 10,781.00 10,262.00 6,727.00
2015-06-30 40,249.00 9,850.00 10,756.00 6,644.00
2015-03-31 41,398.00 11,168.00 10,818.00 6,685.00
2014-12-31 42,237.00 11,920.00 11,172.00 6,532.00
2014-09-30 43,075.00 5,385.00 11,501.00 6,435.00
2014-06-30 43,550.00 5,614.00 11,304.00 6,544.00
2014-03-31 43,626.00 4,516.00 11,511.00 6,774.00
2013-12-31 44,033.00 4,404.00 11,672.00 7,123.00
2013-09-30 44,450.00 4,531.00 12,084.00 7,563.00
2013-06-30 44,907.00 5,136.00 12,303.00 7,822.00
2013-03-31 46,207.00 6,022.00 12,362.00 7,965.00
2012-12-31 47,267.00 6,165.00 12,686.00 7,911.00
2012-09-30 47,824.00 6,766.00 12,709.00 7,497.00

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Merck has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).
  • Merck used its assets more efficiently than the US Pharmaceuticals industry average last year based on Return on Assets.
  • Merck has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Merck's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Pharmaceuticals industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Merck has a total score of 5/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

MRK Health

 How is Merck's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Merck's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • 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.
Balance sheet
This treemap shows a more detailed breakdown of Merck's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of physical assets or inventory.
  • Debt is covered by short term assets, assets are 1x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Merck Company Filings, last reported 3 months ago.

NYSE:MRK Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2019-03-31 27,670.00 25,944.00 8,798.00
2018-12-31 26,882.00 25,195.00 8,864.00
2018-09-30 32,656.00 23,732.00 10,285.00
2018-06-30 32,766.00 23,470.00 7,594.00
2018-03-31 33,901.00 23,671.00 7,346.00
2017-12-31 34,569.00 24,465.00 8,498.00
2017-09-30 38,499.00 27,021.00 11,195.00
2017-06-30 39,712.00 24,910.00 11,967.00
2017-03-31 40,088.00 28,509.00 15,249.00
2016-12-31 40,308.00 24,871.00 14,341.00
2016-09-30 43,957.00 25,144.00 13,067.00
2016-06-30 43,446.00 24,286.00 11,834.00
2016-03-31 43,901.00 25,770.00 12,943.00
2015-12-31 44,767.00 26,436.00 13,427.00
2015-09-30 45,679.00 26,667.00 12,090.00
2015-06-30 46,638.00 26,600.00 11,371.00
2015-03-31 47,917.00 30,248.00 15,601.00
2014-12-31 48,791.00 21,418.00 15,719.00
2014-09-30 45,360.00 27,863.00 14,347.00
2014-06-30 48,516.00 23,081.00 13,395.00
2014-03-31 52,564.00 28,170.00 20,513.00
2013-12-31 52,326.00 25,085.00 17,486.00
2013-09-30 50,006.00 26,645.00 18,169.00
2013-06-30 50,105.00 28,141.00 18,098.00
2013-03-31 55,606.00 20,825.00 16,022.00
2012-12-31 55,463.00 20,569.00 16,141.00
2012-09-30 58,212.00 19,600.00 18,117.00
  • Merck's level of debt (93.8%) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (53.5% vs 93.8% today).
  • Debt is well covered by operating cash flow (42.8%, greater than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 26.4x coverage).
X
Financial health checks
We assess Merck's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Merck has a total score of 3/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

MRK Dividends

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

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
2.71%
Current annual income from Merck dividends. Estimated to be 2.97% next year.
If you bought $2,000 of Merck shares you are expected to receive $54 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Merck's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.44%).
  • Merck's dividend is below the markets top 25% of dividend payers in United States of America (3.78%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NYSE:MRK Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 14 Analyst Estimates (S&P Global) See Below
United States of America Pharmaceuticals Industry Average Dividend Yield Market Cap Weighted Average of 10 Stocks 2.8%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 2017 Stocks 2.4%
United States of America Minimum Threshold Dividend Yield 10th Percentile 0.8%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.4%
United States of America Top 25% Dividend Yield 75th Percentile 3.8%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NYSE:MRK Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2023-12-31 2.78 3.00
2022-12-31 2.67 3.00
2021-12-31 2.46 7.00
2020-12-31 2.36 9.00
2019-12-31 2.22 9.00
NYSE:MRK Past Annualized Dividends Data
Date (Data in $) Dividend per share (annual) Avg. Yield (%)
2019-01-29 2.200 2.737
2018-07-24 1.920 2.675
2018-05-22 1.920 3.131
2018-01-23 1.920 3.387
2017-11-28 1.920 3.365
2017-07-25 1.880 3.062
2017-05-23 1.880 2.938
2017-02-28 1.880 2.950
2016-11-22 1.880 3.030
2016-07-26 1.840 2.974
2016-05-24 1.840 3.203
2016-02-23 1.840 3.413
2015-11-24 1.840 3.565
2015-07-22 1.800 3.345
2015-05-26 1.800 3.075
2015-02-24 1.800 3.087
2014-11-25 1.800 3.008
2014-07-23 1.760 3.009
2014-05-27 1.760 3.026
2014-02-25 1.760 3.119
2013-11-26 1.760 3.423
2013-07-24 1.720 3.618
2013-05-28 1.720 3.617
2013-02-26 1.720 3.791
2012-11-27 1.720 4.026
2012-07-24 1.680 3.772
2012-05-22 1.680 4.200
2012-02-28 1.680 4.392
2011-11-10 1.680 4.529
2011-07-26 1.520 4.669
2011-05-24 1.520 4.257
2011-02-22 1.520 4.467
2010-11-23 1.520 4.369
2010-07-27 1.520 4.239
2010-05-26 1.520 4.341
2010-02-23 1.520 4.252
2009-11-24 1.520 4.046
2009-07-28 1.520 4.748
2009-05-27 1.520 5.614
2009-02-24 1.520 6.022
2008-11-25 1.520 5.385

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • 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
What portion of Merck's earnings are paid to the shareholders as a dividend.
  • Dividends paid are covered by earnings (1.6x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be well covered by earnings (2.4x coverage).
X
Income/ dividend checks
We assess Merck's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.8%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Merck afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Merck has a total score of 5/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

MRK Management

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

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Ken Frazier
COMPENSATION $20,934,504
AGE 64
TENURE AS CEO 8.5 years
CEO Bio

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 Executive Officer of MSD SHARP & DOHME GMBH. Mr. Frazier served as the President of Global Human Health at Merck & Co., Inc. since August 1, 2007 and also served as its Executive Vice President from November 2006 to May 1, 2010, Senior Vice President from December 1999 to November 2006 and General Counsel from December 1999 to August 1, 2007. Mr. Frazier served as Vice President and Deputy General Counsel of Merck & Co., Inc. from January 1999 to December 1999, Vice President of Public Affairs and Assistant General Counsel from January 1997 to January 1999 and Vice President of Public Affairs from April 1994 to 1996, where he was responsible for public affairs, corporate legal activities and The Merck Company Foundation. He served as Manager of MedcoHealth Solutions Inc. since April 2002. He served as Vice President, General Counsel and Secretary of Astra Merck from 1992 to 1994. He was a Partner in Litigation Department of Drinker Biddle & Reath from 1978 to 1992. He has been the Chairman of Merck & Co., Inc. since December 1, 2011 and has been its Director since January 1, 2011. He has been an Independent Non-Executive Director at Exxon Mobil Corporation since May 2009. Mr. Frazier serves as a Director of Ethics Resource Center. He serves as a Board Member of Cornerstone Christian Academy, Ithaka and Legal Services of New Jersey. He serves as an Advisory Board Member of CorporateProBono.Org, Metropolitan Corporate Counsel, National Legal Aid and Defender Association, The Rand Institute for Civil Justice, Seton Hall University Health Law & Policy Center and University of Pennsylvania Law & Economics Center. Mr. Frazier served as a Director of MedcoHealth Solutions Inc. He is a Member of Council of the American Law Institute, American Bar Association, American Corporate Counsel Association, Association of General Counsel, Council on Foreign Relations and Pennsylvania Bar Association. His Bar Admissions include : Supreme Court of the United States since 2002; Pennsylvania State Bar since 1978 and U.S. District Court for the Eastern District of Pennsylvania since 1978. He holds a JD from Harvard Law School in 1978 and a BA in Political Science from Pennsylvania State University in 1975.

CEO Compensation
  • Ken's compensation has been consistent with company performance over the past year, both up more than 20%.
  • Ken's remuneration is higher than average for companies of similar size in United States of America.
Management Team Tenure

Average tenure and age of the Merck management team in years:

5.3
Average Tenure
55
Average Age
  • The average tenure for the Merck management team is over 5 years, this suggests they are a seasoned and experienced team.
Management Team

Ken Frazier

TITLE
Chairman
COMPENSATION
$21M
AGE
64
TENURE
8.5 yrs

Rob Davis

TITLE
Executive VP of Global Services & CFO
COMPENSATION
$7M
AGE
52
TENURE
5.3 yrs

Jennifer Zachary

TITLE
Executive VP & General Counsel
COMPENSATION
$5M
AGE
41
TENURE
1.3 yrs

Roger Perlmutter

TITLE
Executive VP & President of Merck Research Laboratories
COMPENSATION
$7M
AGE
67
TENURE
6.3 yrs

Adam Schechter

TITLE
Special Advisor
COMPENSATION
$7M
AGE
54
TENURE
9.2 yrs

Rita Karachun

TITLE
Senior VP of Finance & Global Controller
AGE
55
TENURE
5.3 yrs

Jim Scholefield

TITLE
Executive VP and Chief Information & Digital Officer
AGE
57
TENURE
0.8 yrs

Teri Loxam

TITLE
Senior VP of Investor Relations & Global Communications
TENURE
3.9 yrs

Ashley Watson

TITLE
Senior VP and Chief Ethics & Compliance Officer
AGE
50
TENURE
4.3 yrs

Adele Ambrose

TITLE
Chief Communications Officer and Senior Vice President
AGE
62
TENURE
9.7 yrs
Board of Directors Tenure

Average tenure and age of the Merck board of directors in years:

11.7
Average Tenure
65.5
Average Age
  • The average tenure for the Merck board of directors is over 10 years, this suggests they are a seasoned and experienced board.
Board of Directors

Ken Frazier

TITLE
Chairman
COMPENSATION
$21M
AGE
64
TENURE
7.6 yrs

Tom Glocer

TITLE
Independent Director
COMPENSATION
$320K
AGE
60
TENURE
11.7 yrs

Les Brun

TITLE
Lead Independent Director
COMPENSATION
$360K
AGE
67

Pam Craig

TITLE
Independent Director
COMPENSATION
$355K
AGE
62
TENURE
3.8 yrs

Peter Wendell

TITLE
Independent Director
COMPENSATION
$360K
AGE
68
TENURE
15.8 yrs

Wendell Weeks

TITLE
Independent Director
COMPENSATION
$360K
AGE
59
TENURE
15.4 yrs

Shelly Lazarus

TITLE
Independent Director
COMPENSATION
$360K
AGE
71
TENURE
14.8 yrs

Tom Cech

TITLE
Independent Director
COMPENSATION
$348K
AGE
72
TENURE
10.2 yrs

Pat Russo

TITLE
Independent Director
COMPENSATION
$330K
AGE
67
TENURE
23.8 yrs

Paul Rothman

TITLE
Independent Director
COMPENSATION
$355K
AGE
61
TENURE
3.8 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month individual insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price ($) Value ($)
02. Aug 18 Sell Rita Karachun Individual 02. Aug 18 02. Aug 18 -5,000 $65.01 $-325,040
X
Management checks
We assess Merck's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Merck has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

MRK News

Simply Wall St News

Merck (NYSE:MRK) Seems To Use Debt Rather Sparingly

Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. … NYSE:MRK Historical Debt, July 18th 2019 A Look At Merck's Liabilities Zooming in on the latest balance sheet data, we can see that Merck had liabilities of US$18.5b due within 12 months and liabilities of US$36.1b due beyond that. … Finally, a business needs free cash flow to pay off debt; accounting profits just don't cut it.

Simply Wall St -

Did Merck's (NYSE:MRK) Share Price Deserve to Gain 46%?

Merck was able to grow its EPS at 25% per year over three years, sending the share price higher. … This EPS growth is higher than the 14% average annual increase in the share price. … When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return.

Simply Wall St -

An Intrinsic Calculation For Merck & Co., Inc. (NYSE:MRK) Suggests It's 28% Undervalued

Using the most recent financial data, we'll take a look at whether the stock is fairly priced by taking the expected future cash flows and discounting them to their present value. … Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today's dollars: 10-year free cash flow (FCF) estimate 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Levered FCF ($, Millions) $10.34k $12.44k $13.80k $14.50k $15.87k $16.87k $17.75k $18.54k $19.27k $19.96k Growth Rate Estimate Source Analyst x6 Analyst x6 Analyst x5 Analyst x2 Analyst x2 Est @ 6.27% Est @ 5.21% Est @ 4.47% Est @ 3.94% Est @ 3.58% Present Value ($, Millions) Discounted @ 7.68% $9.61k $10.73k $11.05k $10.79k $10.97k $10.82k $10.57k $10.26k $9.90k $9.53k Present Value of 10-year Cash Flow (PVCF)= $104.21b "Est" = FCF growth rate estimated by Simply Wall St We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. … Terminal Value (TV) = FCF2029 × (1 + g) ÷ (r – g) = US$20b × (1 + 2.7%) ÷ (7.7% – 2.7%) = US$414b Present Value of Terminal Value (PVTV) = TV / (1 + r)10 = $US$414b ÷ ( 1 + 7.7%)10 = $197.69b The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is $301.91b.

Simply Wall St -

Despite Its High P/E Ratio, Is Merck & Co., Inc. (NYSE:MRK) Still Undervalued?

The formula for price to earnings is: Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS) Or for Merck: P/E of 26.55 = $84.57 ÷ $3.19 (Based on the year to March 2019.) Is A High Price-to-Earnings Ratio Good? … How Growth Rates Impact P/E Ratios P/E ratios primarily reflect market expectations around earnings growth rates. … That means even if the current P/E is high, it will reduce over time if the share price stays flat.

Simply Wall St -

Is Merck & Co., Inc. (NYSE:MRK) Undervalued After Accounting For Its Future Growth?

Merck is available at price-to-earnings ratio of 26.02x, showing us it is overvalued based on current earnings compared to the Pharmaceuticals industry average of 17.32x , and overvalued compared to the US market average ratio of 17.72x. … NYSE:MRK Price Estimation Relative to Market, June 14th 2019 We understand MRK seems to be overvalued based on its current earnings, compared to its industry peers. … So, when we include the growth factor in our analysis, Merck appears overvalued , based on fundamental analysis.

Simply Wall St -

Is Merck & Co., Inc.'s (NYSE:MRK) Balance Sheet Strong Enough To Weather A Storm?

See our latest analysis for Merck MRK’s Debt (And Cash Flows) MRK has built up its total debt levels in the last twelve months, from US$24b to US$27b , which includes long-term debt. … With this increase in debt, the current cash and short-term investment levels stands at US$8.8b , ready to be used for running the business. … Moreover, MRK has generated cash from operations of US$11b during the same period of time, leading to an operating cash to total debt ratio of 41%, indicating that MRK’s debt is appropriately covered by operating cash.

Simply Wall St -

Boasting A 30% Return On Equity, Is Merck & Co., Inc. (NYSE:MRK) A Top Quality Stock?

One way to conceptualize this, is that for each $1 of shareholders' equity it has, the company made $0.30 in profit. … The formula for return on equity is: Return on Equity = Net Profit ÷ Shareholders' Equity Or for Merck: 30% = US$8.4b ÷ US$28b (Based on the trailing twelve months to March 2019.) Most readers would understand what net profit is, but it’s worth explaining the concept of shareholders’ equity. … One simple way to determine if a company has a good return on equity is to compare it to the average for its industry.

Simply Wall St -

Could Merck & Co., Inc.'s (NYSE:MRK) Investor Composition Influence The Stock Price?

See our latest analysis for Merck NYSE:MRK Ownership Summary, May 20th 2019 What Does The Institutional Ownership Tell Us About Merck? … NYSE:MRK Income Statement, May 20th 2019 Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. … Insider Ownership Of Merck The definition of company insiders can be subjective, and does vary between jurisdictions.

Simply Wall St -

A Spotlight On Merck & Co., Inc.'s (NYSE:MRK) Fundamentals

By this I mean, I look at stocks holistically, from their financial health to their future outlook. … (NYSE:MRK), it is a dependable dividend payer with a an impressive track record of delivering benchmark-beating performance. … NYSE:MRK Historical Dividend Yield, May 12th 2019 Next Steps: For Merck, there are three fundamental factors you should look at: Future Outlook: What are well-informed industry analysts predicting for MRK’s future growth?

Simply Wall St -

Why Merck & Co., Inc. (NYSE:MRK) Could Have A Place In Your Portfolio

Help shape the future of investing tools and you could win a $250 gift card! … (NYSE:MRK) is a stock with outstanding fundamental characteristics. … When we build an investment case, we need to look at the stock with a holistic perspective.

Simply Wall St -

MRK Company Info

Description

Merck & Co., Inc. provides healthcare solutions worldwide. It operates through four segments: Pharmaceutical, Animal Health, Healthcare Services, and Alliances. The company offers therapeutic and preventive agents to treat cardiovascular, type 2 diabetes, chronic hepatitis C virus, HIV-1 infection, intra-abdominal, fungal infection, insomnia, and inflammatory diseases. It also provides neuromuscular blocking agents; cholesterol modifying medicines; and anti-bacterial and vaginal contraceptive products. In addition, the company offers products to prevent chemotherapy-induced and post-operative nausea and vomiting; treat non-small-cell lung, ovarian and breast, thyroid, and cervical cancer, as well as brain tumors; and prevent diseases caused by human papillomavirus, as well as offers vaccines for measles, mumps, rubella, varicella, shingles, rotavirus gastroenteritis, and pneumococcal diseases. Further, it provides antibiotic and anti-inflammatory drugs to treat infectious and respiratory diseases, fertility disorders, and pneumonia in cattle, bovine, and swine; vaccines for poultry; parasiticide for sea lice in salmon; and antibiotics and vaccines for fishes. Additionally, the company offers companion animal products, such as ointments; diabetes mellitus treatment and anthelmintic products; products to treat fleas and ticks in dogs and cats; fertility management products for horses; vaccines for dogs, cats, and horses; and products for protection against bites from fleas, ticks, mosquitoes, and sandflies. It has collaborations with AstraZeneca PLC; Bayer AG; Eisai Co., Ltd.; Intec Pharma Ltd.; Nerviano Medical Sciences; and Healthy Interactions, Inc. The company serves drug wholesalers and retailers, hospitals, government agencies and entities, physicians, distributors, veterinarians, animal producers, and managed health care providers. Merck & Co., Inc. was founded in 1891 and is headquartered in Kenilworth, New Jersey.

Details
Name: Merck & Co., Inc.
MRK
Exchange: NYSE
Founded: 1891
$209,086,872,536
2,574,644,410
Website: http://www.merck.com
Address: Merck & Co., Inc.
2000 Galloping Hill Road,
Kenilworth,
New Jersey, 07033,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NYSE MRK Common Stock New York Stock Exchange US USD 02. Jan 1968
DB 6MK Common Stock Deutsche Boerse AG DE EUR 02. Jan 1968
XTRA 6MK Common Stock XETRA Trading Platform DE EUR 02. Jan 1968
LSE 0QAH Common Stock London Stock Exchange GB EUR 02. Jan 1968
SWX MRK Common Stock SIX Swiss Exchange CH CHF 02. Jan 1968
ENXTPA MRK Common Stock Euronext Paris FR EUR 02. Jan 1968
WBAG MRK Common Stock Wiener Boerse AG AT EUR 02. Jan 1968
SNSE MRK Common Stock Santiago Stock Exchange CL USD 02. Jan 1968
BMV MRK * Common Stock Bolsa Mexicana de Valores MX MXN 02. Jan 1968
BOVESPA MRCK34 BDR EACH REPR 1 COM SH Bolsa de Valores de Sao Paulo BR BRL 28. Dec 2011
BASE MRK CEDEAR (10 REP 1 USD0.50) Buenos Aires Stock Exchange AR ARS 06. Mar 2000
Number of employees
Current staff
Staff numbers
69,000
Merck employees.
Industry
Pharmaceuticals
Pharmaceuticals & Biotech
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/07/22 23:42
End of day share price update: 2019/07/22 00:00
Last estimates confirmation: 2019/07/19
Last earnings filing: 2019/05/08
Last earnings reported: 2019/03/31
Last annual earnings reported: 2018/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

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.