NYSE:MRK

Stock Analysis Report

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Executive Summary

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


Snowflake Analysis

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

Stable Share Price: MRK has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.0%

MRK

0.2%

US Pharmaceuticals

0.5%

US Market


1 Year Return

-1.9%

MRK

14.3%

US Pharmaceuticals

18.0%

US Market

Return vs Industry: MRK underperformed the US Pharmaceuticals industry which returned 14.3% over the past year.

Return vs Market: MRK underperformed the US Market which returned 18% over the past year.


Shareholder returns

MRKIndustryMarket
7 Day3.0%0.2%0.5%
30 Day5.1%1.9%4.5%
90 Day4.6%1.5%19.7%
1 Year1.1%-1.9%17.3%14.3%20.5%18.0%
3 Year48.4%35.8%33.9%24.0%46.3%36.8%
5 Year74.3%49.7%39.9%24.1%87.2%66.8%

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 compared to its fair value and its price relative to the market?

20.24x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: MRK ($83.48) is trading above our estimate of fair value ($77.59)

Significantly Below Fair Value: MRK is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: MRK is good value based on its PE Ratio (20.2x) compared to the US Pharmaceuticals industry average (25x).

PE vs Market: MRK is poor value based on its PE Ratio (20.2x) compared to the US market (19.3x).


Price to Earnings Growth Ratio

PEG Ratio: MRK is poor value based on its PEG Ratio (5x)


Price to Book Ratio

PB vs Industry: MRK is overvalued based on its PB Ratio (7.6x) compared to the US Pharmaceuticals industry average (3.2x).


Next Steps

Future Growth

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

4.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MRK's forecast earnings growth (4% per year) is above the savings rate (2.2%).

Earnings vs Market: MRK's earnings (4% per year) are forecast to grow slower than the US market (24.2% per year).

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

Revenue vs Market: MRK's revenue (4% per year) is forecast to grow slower than the US market (9.5% per year).

High Growth Revenue: MRK's revenue (4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MRK's Return on Equity is forecast to be very high in 3 years time (50%).


Next Steps

Past Performance

How has Merck performed over the past 5 years?

9.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MRK has high quality earnings.

Growing Profit Margin: MRK's current net profit margins (22.2%) are higher than last year (21.1%).


Past Earnings Growth Analysis

Earnings Trend: MRK's earnings have grown by 9.6% per year over the past 5 years.

Accelerating Growth: MRK's earnings growth over the past year (11.9%) exceeds its 5-year average (9.6% per year).

Earnings vs Industry: MRK earnings growth over the past year (11.9%) exceeded the Pharmaceuticals industry 6%.


Return on Equity

High ROE: Whilst MRK's Return on Equity (37.85%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is Merck's financial position?


Financial Position Analysis

Short Term Liabilities: MRK's short term assets ($29.3B) exceed its short term liabilities ($22.2B).

Long Term Liabilities: MRK's short term assets ($29.3B) do not cover its long term liabilities ($40.7B).


Debt to Equity History and Analysis

Debt Level: MRK's debt to equity ratio (107.7%) is considered high.

Reducing Debt: MRK's debt to equity ratio has increased from 57.1% to 107.7% over the past 5 years.

Debt Coverage: MRK's debt is well covered by operating cash flow (43.8%).

Interest Coverage: MRK's interest payments on its debt are well covered by EBIT (21.6x coverage).


Balance Sheet


Next Steps

Dividend

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

2.92%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: MRK's dividend (2.92%) is higher than the bottom 25% of dividend payers in the US market (1.59%).

High Dividend: MRK's dividend (2.92%) is low compared to the top 25% of dividend payers in the US market (4.32%).


Stability and Growth of Payments

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 (56.3%), 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 (42.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.6yrs

Average management tenure


CEO

Ken Frazier (65 yo)

9.58yrs

Tenure

US$27,648,475

Compensation

Mr. Kenneth C. Frazier, also known as Ken, has been Independent Lead Director at Exxon Mobil Corp. since 2020. He has been the President of Merck & Co., Inc. since May 01, 2010 and has also been its Chief ...


CEO Compensation Analysis

Compensation vs Market: Ken's total compensation ($USD27.65M) is above average for companies of similar size in the US market ($USD11.30M).

Compensation vs Earnings: Ken's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Kenneth Frazier
Chairman9.58yrsUS$27.65m0.031%
$ 65.8m
Robert Davis
Executive VP of Global Services & CFO6.33yrsUS$7.73m0.0068%
$ 14.3m
Jennifer Zachary
Executive VP2.33yrsUS$5.05m0.00026%
$ 549.0k
Roger Perlmutter
Executive VP & President of Merck Research Laboratories7.33yrsUS$9.22m0.0085%
$ 17.9m
Sanat Chattopadhyay
Executive VP & President of Merck Manufacturing Division10.75yrsUS$5.42m0.0031%
$ 6.5m
David Williams
Chief Information & Digital Officerno datano datano data
Peter Dannenbaum
Vice President of Investor Relations1yrno datano data
Michael Fleming
Senior VP and Chief Ethics & Compliance Officer1.42yrsno data0.00027%
$ 570.1k
Jennifer Mauer
Vice President of Global Communicationsno datano datano data
Michael Nally
Chief Marketing Officer & Executive VP1.58yrsno data0.00050%
$ 1.1m
Steven Mizell
Executive VP & Chief Human Resources Officer3.67yrsno data0.00012%
$ 253.4k
Julie Gerberding
EVP and Chief Patient Officer of Strategic Communications5.58yrsno data0.0010%
$ 2.2m

4.6yrs

Average Tenure

60yo

Average Age

Experienced Management: MRK's management team is considered experienced (4.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Kenneth Frazier
Chairman9.58yrsUS$27.65m0.031%
$ 65.8m
Peter Wendell
Independent Director16.92yrsUS$330.00k0.000040%
$ 84.5k
Pamela Craig
Independent Director4.92yrsUS$348.50k0.000070%
$ 147.8k
Patricia Russo
Independent Director24.92yrsUS$300.00k0.00052%
$ 1.1m
Thomas Glocer
Independent Director12.75yrsUS$345.00k0.00020%
$ 422.3k
Leslie Brun
Lead Independent Directorno dataUS$360.00k0.000080%
$ 168.9k
Thomas Cech
Independent Director11.25yrsUS$360.00kno data
Inge Thulin
Independent Director2.42yrsUS$300.00kno data
Kathy Warden
Independent Director0.42yrno data0.000020%
$ 42.2k
Christine Seidman
Independent Director0.42yrno datano data
Paul Rothman
Independent Director4.92yrsUS$340.00kno data
Mary Coe
Independent Director1.42yrsUS$289.85kno data

4.9yrs

Average Tenure

65.5yo

Average Age

Experienced Board: MRK's board of directors are considered experienced (4.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

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


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

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$211.141b
  • Shares outstanding: 2.53b
  • 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
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
10683053SWX (SIX Swiss Exchange)YesCommon StockCHCHFJan 1968
0QAHLSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
6MKXTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1968
MRKSNSE (Santiago Stock Exchange)YesCommon StockCLUSDJan 1968
MRK-UETLX (Eurotlx)YesCommon StockITEURJan 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. The company offers therapeutic and preventive agents for cardiovascular, type 2 diabetes, chronic hepatitis C virus, HIV-1 infection, intra-abdomi ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/08/15 06:07
End of Day Share Price2020/08/14 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


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.