April 10, 2025
Top 10 Stock Merck (USA) Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Merck (USA) – Top 10 Stock in Dow Jones Industrial Average
Merck (USA) is listed as a top 10 stock on April 10, 2025 in the market index Dow Jones because of its high performance in at least one of the Obermatt investment strategies. As all consolidated Obermatt Ranks exhibit excellent performance, including positive market sentiment in the professional investor community, it is a solid stock investment where the risk of paying too much for the shares is limited. Based on the Obermatt 360° View of 72 (high 72% performer), Obermatt assesses an overall buy recommendation for Merck (USA) on April 10, 2025.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Pharmaceuticals |
| Index | Dow Jones, Dividends USA, Diversity USA, D.J. US Pharmaceutical, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Merck (USA) Buy
| 360 METRICS | April 10, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 67 |
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| GROWTH | ||||||||
| GROWTH | 61 |
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| SAFETY | ||||||||
| SAFETY | 53 |
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| SENTIMENT | ||||||||
| SENTIMENT | 56 |
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| 360° VIEW | ||||||||
| 360° VIEW | 72 |
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ANALYSIS: With an Obermatt 360° View of 72 (better than 72% compared with alternatives), overall professional sentiment and financial characteristics for the stock Merck (USA) are above average. The 360° View is based on consolidating four consolidated indicators, with all four indicators above average for Merck (USA). The consolidated Value Rank has an attractive rank of 67, which means that the share price of Merck (USA) is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 67% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 61, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The company is also safely financed with a Safety rank of 53. Finally, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 56. ...read more
RECOMMENDATION: With a consolidated 360° View of 72, Merck (USA) is better positioned than 72% of all alternative stock investment opportunities based on the Obermatt Method. As all consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 67), above-average growth (Growth Rank of 61), safe financing practices (Safety Rank of 53), and a positive market sentiment in the professional investor community (Sentiment Rank of 56), it is a solid stock investment where the risk of paying too much for the shares is limited and disappointments are less likely to occur, unless information not publicly available. High-Value Ranks sometimes indicate that the company's future is challenging. If they are safely financed and have above average growth, and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Merck (USA) is as difficult as the stock’s low price, despite what good growth and safe financing practice suggest. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible, which may indicate good timing right now. ...read more
Sentiment Strategy: Professional Market Sentiment for Merck (USA) positive
ANALYSIS: With an Obermatt Sentiment Rank of 56 (better than 56% compared with alternatives), overall professional sentiment and engagement for the stock Merck (USA) is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and the other half above average for Merck (USA). Analyst Opinions are at a rank of 44 (worse than 56% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 26, which means that stock research experts are getting more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 29, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 71% of competitors). On the upside, the Professional Investors rank is 96, which means that professional investors hold more stock in this company than in 96% of alternative investment opportunities. Pros tend to favor investing in this company. This could be due to a large company size, which could contribute to the higher share of professional investors in the company. If this is not the case, the low sentiment ranks are more challenging to explain. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 56 (more positive than 56% compared with investment alternatives), Merck (USA) has a reputation among professional investors that is above-average compared with that of its competitors. Should the company be on the smaller side, the presence of professional investors could be reassuring. That would make Merck (USA) stock something like a hidden gem. Investors should make sure with further research that this is true, because all other sentiment indicators are negative which is a sign for caution. ...read more
Value Strategy: Merck (USA) Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 67 (better than 67% compared with alternatives), Merck (USA) shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Merck (USA). Price-to-Profit (also referred to as price-earnings, P/E) is 68 which means that the stock price compared with what market professionals expect for future profits is lower than for 68% of comparable companies, indicating a good value concerning Merck (USA)'s profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 23, which means that the stock price is lower as regards to invested capital than for 23% of comparable investments. On the other hand, Price-to-Sales is less favorable than 73% of alternatives (only 27% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 4% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 67, is a buy recommendation based on Merck (USA)'s stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: Merck (USA) Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 61 (better than 61% compared with alternatives), Merck (USA) shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Merck (USA). Only Capital Growth has a good rank of 69, which means that currently professionals expect the company to grow its invested capital more than 46% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 36 which means that currently professionals expect the company to grow less than 64% of its competitors. Profit Growth with a rank of 46 and Stock Returns with a rank of 47 are also low (below 53% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 61, is a buy recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Merck (USA) is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: Merck (USA) Debt Financing Safety above-average
| SAFETY METRICS | April 10, 2025 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 35 |
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| REFINANCING | ||||||||
| REFINANCING | 26 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 91 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 53 |
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ANALYSIS: With an Obermatt Safety Rank of 53 (better than 53% compared with alternatives), the company Merck (USA) has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Merck (USA) is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Merck (USA). Liquidity is at 91, meaning the company generates more profit to service its debt than 91% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 26, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 74% of its competitors. Leverage is also high at a rank of 35, which means that the company has an above-average debt-to-equity ratio. It has more debt than 65% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 53 (better than 53% compared with alternatives), Merck (USA) has a financing structure that is safer than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Merck (USA) Above-Average Financial Performance
| COMBINED PERFORMANCE | April 10, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 67 |
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| GROWTH | ||||||||
| GROWTH | 61 |
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| SAFETY | ||||||||
| SAFETY | 91 |
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| COMBINED | ||||||||
| COMBINED | 74 |
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ANALYSIS: With an Obermatt Combined Rank of 74 (better than 74% compared with investment alternatives), Merck (USA) (Pharmaceuticals, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Merck (USA) are a good value (attractively priced) with a consolidated Value Rank of 67 (better than 67% of alternatives), show above-average growth (Growth Rank of 61), and are safely financed (Safety Rank of 53), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 74, is a buy recommendation based on Merck (USA)'s financial characteristics. As the company Merck (USA)'s key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 67), above-average growth (Obermatt Growth Rank of 61), and indicate that the company is safely financed (Obermatt Safety Rank of 53), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Merck (USA). If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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