Merck & Co., Inc.

Health Care
Biotechnology: Pharmaceutical Preparations
www.merck.com

Earnings Score
Moat Score
Safety Score

Market Cap $262.90B
PE 22
Debt $38.13B
Cash $14.69B
EV $286.34B
FCF $14.84B

Earnings

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Sales & Net Margins

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Earnings	$12.15B
EBIT	$13.72B
ROE	27%
ROA	12%
FCF	$14.84B
Equity	$44.56B
Growth Stability	3%
PE	21.64
PEG	-1.31
PB	5.9
P/FCF	17.72
P/S	4.16
Price/Cash	0.06
Debt/Equity	0.86
Debt/FCF	2.57
Net Margins	28%
Gross Margins	76%
Op. Margins	22%
Earnings CAGR	8%
Sales Growth YoY	4%
Sales Growth QoQ	3%
Sales CAGR	6%
FCF CAGR	6%
Equity CAGR	-1%
Earnings Stability	0.06
Earnings Growth YoY	-33%
Earnings Growth QoQ	-42%
Earnings CAGR 5Y	-17%

Sales CAGR 5Y	8%
FCF CAGR 5Y	15%
Equity CAGR 5Y	13%
Earnings CAGR 3Y	7%
Sales CAGR 3Y	7%
FCF CAGR 3Y	3%
Equity CAGR 3Y	1%
Market Cap	$262.90B
Revenue	$63.17B
Dividend Yield	3%
Payout Ratio	65%
Assets	$117.53B
Total Debt	$38.13B
Cash	$14.69B
Shares Outstanding	2.53B
EV	286.34B
Earnings Score	7%
Moat Score	95%
Safety Score	61%
Final Score	54%
Working Capital	10.78B
Current Ratio	1.36
Gross Profit	$47.90B
Shares Growth 3y	0%
Equity Growth QoQ	2%
Equity Growth YoY	8%

Assets & ROA

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Stockholders Equity & ROE

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Merck makes pharmaceutical products to treat several conditions in a number of therapeutic areas, including cardiometabolic disease, cancer, and infections. Within cancer, the firm's immuno-oncology platform is growing as a major contributor to overall sales. The company also has a substantial vaccine business, with treatments to prevent hepatitis B and pediatric diseases as well as HPV and shingles. Additionally, Merck sells animal health-related drugs. From a geographical perspective, just under half of the firm's sales are generated in the United States.

SEC Filings

Direct access to Merck & Co., Inc. (MRK) Annual Reports (10K) and Quarterly Reports (10Q) from the SEC website.

2024
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31
2023
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31
2022
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31

Sector Comparison

How does Merck & Co., Inc. compare to its competitors?

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Peter Lynch's Chart

This chart shows the current pricing of Merck & Co., Inc. compared to its past. The addition of the earnings trend line provides further insights into the company's earnings power.

CAGR 8%

Stability 6%

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Merck & Co., Inc. Discounted Cash Flow

Fully customizable DCF calculator online for Merck & Co., Inc..

Years

Calculation mode

= $224B

	0	1	2	3	4	5	6	7	8	9	10	TV
fcf	$15B	$16B	$17B	$18B	$19B	$20B	$21B	$22B	$24B	$25B	$27B	$265B
DCF		$14B	$14B	$13B	$13B	$12B	$12B	$11B	$11B	$11B	$10B	$102B
Value	$224B

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

Years	12/2014	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	TTM
Net Margins	28%	11%	10%	6%	15%	21%	15%	27%	24%	1%	28%
ROA	-	5%	5%	7%	11%	14%	10%	13%	15%	2%	12%
ROE	-	10%	10%	7%	23%	38%	28%	34%	32%	1%	27%

Good Net Margins (27.55%)

Net Margins are high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Safety and Stability

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Years	12/2014	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	TTM
Debt over FCF	-	2.38	2.84	5.35	3.02	2.64	5.71	3.82	2.09	3.84	2.57
Debt over Equity	0.44	0.59	0.62	0.71	0.93	1.01	1.25	0.87	0.67	0.93	0.86
Growth Stability	-	-	-	35%	100%	100%	100%	100%	100%	3%	3%

Neutral Debt/FCF ratio (2.57)

Net Margins are at a level that is not too high nor too low. They are not a competitive advantage but they are not a competitive disadvantage either.

Good Debt/Equity ratio (0.86)

The company is not overleveraged and has a good balance between equity and debt.

Bad Graham’s Stability (3%)

The company has a bad stability in its earnings, which is a sign of a bad competitive advantage.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Years	12/2014	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	CAGR 5Y
Revenue YoY growth	-	-6%	1%	1%	5%	11%	2%	1%	22%	1%	8%
Earnings YoY growth	-	-63%	-12%	-39%	159%	58%	-28%	85%	11%	-97%	-17%
Equity YoY growth	-	-8%	-10%	-14%	-22%	-3%	-2%	51%	20%	-18%	13%
FCF YoY growth	-	70%	-21%	-48%	82%	20%	-44%	56%	70%	-38%	15%