Merck & Co Inc

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MRK : NYSE : Health Care
$62.7 up 0.2 | 0.32%
Today's Range: 62.327 - 62.93
Avg. Daily Volume: 8325000.0
08/16/17 - 4:00 PM ET

Financial Analysis


MERCK & CO's gross profit margin for the second 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 1.03 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.

During the same period, stockholders' equity ("net worth") has decreased by 8.98% 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 Q2 FY17 Q2 FY16
Net Sales ($mil)9931.09844.0
EBITDA ($mil)3985.03644.0
EBIT ($mil)2829.02191.0
Net Income ($mil)1945.01205.0


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)11967.011834.0
Total Assets ($mil)92804.096475.0
Total Debt ($mil)24887.024286.0
Equity ($mil)39463.043357.0


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin81.4380.05
EBITDA Margin40.1237.01
Operating Margin28.4922.26
Sales Turnover0.430.41
Return on Assets5.485.32
Return on Equity12.8811.83
Debt Q2 FY17 Q2 FY16
Current Ratio1.51.87
Debt/Capital0.390.36
Interest Expense193.0171.0
Interest Coverage14.6612.81


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)2727.132765.63
Div / share0.470.46
EPS0.710.43
Book value / share14.4715.68
Institutional Own % n/a n/a
Avg Daily Volume8426543.09197375.0

Valuation


BUY. MERCK & CO's P/E ratio indicates a premium compared to an average of 28.08 for the Pharmaceuticals industry and a premium compared to the S&P 500 average of 24.31. Conducting a second comparison, its price-to-book ratio of 4.30 indicates a premium versus the S&P 500 average of 3.03 and a significant discount versus the industry average of 16.44. 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 33.98 Peers 28.08   MRK 16.66 Peers 25.61

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

MRK is trading at a premium to 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 significant 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 14.88 Peers 14.98   MRK 0.19 Peers 0.61

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.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
MRK 4.30 Peers 16.44   MRK 0.54 Peers 25.27

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 4.24 Peers 6.45   MRK 1.45 Peers 8.29

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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