Dow Today: Merck (MRK) Lower

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

The Dow Jones Industrial Average ( ^DJI) is trading down 38.0 points (-0.3%) at 13,069 as of Wednesday, Oct 31, 2012, 1:35 p.m. ET. During this time, 307.3 million shares of the 30 Dow components have changed hands vs. an average daily trading volume of 566.7 million. The NYSE advances/declines ratio sits at 1,408 issues advancing vs. 1,586 declining with 115 unchanged.
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Holding back the Dow today is Merck (NYSE: MRK), which is lagging the broader Dow index with a 62-cent decline (-1.4%) bringing the stock to $45.53. This single loss is lowering the Dow Jones Industrial Average by 4.69 points or roughly accounting for 12.3% of the Dow's overall loss. Volume for Merck currently sits at 7.8 million shares traded vs. an average daily trading volume of 10.7 million shares.

Merck has a market cap of $140.56 billion and is part of the health care sector and drugs industry. Shares are up 22.4% year to date as of Tuesday's close. The stock's dividend yield sits at 3.6%.

Merck & Co., Inc. provides various health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products. The company has a P/E ratio of 13.2, below the average drugs industry P/E ratio of 21.2 and below the S&P 500 P/E ratio of 17.7.

TheStreet Ratings rates Merck as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

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