Merck & Co Inc

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MRK : NYSE : Health Care
$62.33 | %
Today's Range: 62.14 - 62.65
Avg. Daily Volume: 9025600.0
04/28/17 - 4:00 PM ET

Financial Analysis


MERCK & CO's gross profit margin for the fourth quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. MERCK & CO has average liquidity. Currently, the Quick Ratio is 1.24 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has decreased by 10.26% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)10115.010215.0
EBITDA ($mil)3713.03657.0
EBIT ($mil)2575.02146.0
Net Income ($mil)-595.0977.0


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)14341.013427.0
Total Assets ($mil)95377.0101779.0
Total Debt ($mil)24842.026514.0
Equity ($mil)40088.044676.0


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin78.6378.52
EBITDA Margin36.735.8
Operating Margin25.4621.01
Sales Turnover0.420.39
Return on Assets4.114.36
Return on Equity9.779.94
Debt Q4 FY16 Q4 FY15
Current Ratio1.781.55
Debt/Capital0.380.37
Interest Expense180.0169.0
Interest Coverage14.3112.7


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)2748.732781.13
Div / share0.470.46
EPS-0.220.35
Book value / share14.5816.06
Institutional Own % n/a n/a
Avg Daily Volume9375230.01.1556526E7

Valuation


BUY. This stock's P/E ratio indicates a premium compared to an average of 43.90 for the Pharmaceuticals industry and a significant premium compared to the S&P 500 average of 24.92. Conducting a second comparison, its price-to-book ratio of 4.29 indicates a premium versus the S&P 500 average of 2.99 and a significant discount versus the industry average of 13.69. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
MRK 45.00 Peers 43.90   MRK 16.57 Peers 18.53

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

MRK is trading at a valuation on par with its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

MRK is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
MRK 14.89 Peers 14.49   MRK 0.27 Peers 1.33

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

MRK is trading at a premium to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

MRK trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
MRK 4.29 Peers 13.69   MRK -10.90 Peers -1.54

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

MRK is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, MRK is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
MRK 4.32 Peers 15.95   MRK 0.78 Peers 4.95

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

MRK is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

MRK significantly trails its peers on the basis of sales growth

 

 

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