Merck & Co Inc

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MRK : NYSE : Health Care
$66.16 | %
Today's Range: 65.84 - 66.389
Avg. Daily Volume: 8929500.0
06/23/17 - 4:00 PM ET

Financial Analysis

MERCK & CO's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. MERCK & CO has average liquidity. Currently, the Quick Ratio is 1.13 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 9.06% 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 Q1 FY17 Q1 FY16
Net Sales ($mil)9434.09312.0
EBITDA ($mil)3530.03638.0
EBIT ($mil)2386.02157.0
Net Income ($mil)1551.01125.0

Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)15249.012943.0
Total Assets ($mil)96561.098755.0
Total Debt ($mil)28474.025769.0
Equity ($mil)39837.043806.0

Profitability Q1 FY17 Q1 FY16
Gross Profit Margin81.6480.76
EBITDA Margin37.4139.06
Operating Margin25.2923.16
Sales Turnover0.410.4
Return on Assets4.54.67
Return on Equity10.910.53
Debt Q1 FY17 Q1 FY16
Current Ratio1.591.64
Interest Expense182.0172.0
Interest Coverage13.1112.54

Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)2740.442769.55
Div / share0.470.46
Book value / share14.5415.82
Institutional Own % n/a n/a
Avg Daily Volume8861247.01.0621859E7


BUY. The current P/E ratio indicates a significant discount compared to an average of 84.59 for the Pharmaceuticals industry and a significant premium compared to the S&P 500 average of 25.73. Conducting a second comparison, its price-to-book ratio of 4.35 indicates a premium versus the S&P 500 average of 3.08 and a significant discount versus the industry average of 10.76. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. Upon assessment of these and other key valuation criteria, MERCK & CO proves to trade at a discount to investment alternatives within the industry.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
MRK 40.77 Peers 84.59   MRK 20.38 Peers 19.60

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

MRK is trading at a significant discount to its peers.


Average. 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 valuation on par to its peers.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
MRK 15.15 Peers 16.00   MRK 0.24 Peers 0.70

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

MRK is trading at a valuation on par with 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.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
MRK 4.35 Peers 10.76   MRK -4.91 Peers 19.71

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.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
MRK 4.34 Peers 11.00   MRK 1.38 Peers 5.56

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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