Fact based stock research
Merck (USA) (NYSE:MRK)

US58933Y1055

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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.

Merck (USA) stock research in summary

merck.com

ANALYSIS: With an Obermatt Combined Rank of 76 (better than 76% compared with investment alternatives), Merck (USA) (Pharmaceuticals, USA) shares have much better financial characteristics than comparable stocks. Shares of Merck (USA) are a good value (attractively priced) with a consolidated Value Rank of 72 (better than 72% of alternatives), show above-average growth (Growth Rank of 71) but are riskily financed (Safety Rank of 45), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 76, is a strong buy recommendation based on Merck (USA)'s financial characteristics. As the company Merck (USA)'s key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 72) and above-average growth (Obermatt Growth Rank of 71), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 45) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	72
Growth Rank	71
Safety Rank	45
Combined Rank	76

Country	USA
Industry	Pharmaceuticals
Index	Dow Jones, Dividends USA, Diversity USA, D.J. US Pharmaceutical, S&P 500
Size class	XX-Large

This stock has achievements: Top 10 Stock.

26-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Merck (USA)

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	33	81	60	72
GROWTH
GROWTH	17	59	43	71
SAFETY
SAFETY	46	94	46	45
SENTIMENT
SENTIMENT	n/a	96	88	^new
360° VIEW
360° VIEW	n/a	100	73	^new

Most recent update of the stock research: 26-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Merck (USA) is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	33	81	60	72
GROWTH
GROWTH	17	59	43	71
SAFETY
SAFETY	46	94	46	45
COMBINED
COMBINED	11	98	44	76

Last update of combined financial performance: 26-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Merck (USA) the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 72 (better than 72% 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 20, which means that the stock price is lower as regards to invested capital than for 20% of comparable investments. On the other hand, Price-to-Sales is less favorable than 72% of alternatives (only 28% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 8% 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 72, 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. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	25	36	24	28
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	35	88	65	68
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	19	12	10	20
DIVIDEND YIELD
DIVIDEND YIELD	83	94	89	92
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	33	81	60	72

Last update of Value Rank: 26-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Merck (USA); except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 71 (better than 71% 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 metrics below average for Merck (USA). While Profit Growth has a good rank of 100, as professionals currently expect the company to grow its profits more than 100% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 46, which means that currently professionals expect the company to grow less than 54% of its competitors, while Capital Growth has a rank of 43 and Stock Returns have been below market median, with a rank of 47 (53% of alternative investments were better). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 71, is a buy recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	19	51	56	46
PROFIT GROWTH
PROFIT GROWTH	6	62	10	100
CAPITAL GROWTH
CAPITAL GROWTH	n/a	32	56	43
STOCK RETURNS
STOCK RETURNS	29	73	59	47
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	17	59	43	71

Last update of Growth Rank: 26-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Merck (USA).

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 45 (better than 45% compared with alternatives), the company Merck (USA) has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Merck (USA) is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, 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 92, meaning the company generates more profit to service its debt than 92% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 25, 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 75% of its competitors. Leverage is also high at a rank of 31, which means that the company has an above-average debt-to-equity ratio. It has more debt than 69% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 45 (worse than 55% compared with alternatives), Merck (USA) has a financing structure that is riskier 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. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	56	34	45	31
REFINANCING
REFINANCING	30	95	23	25
LIQUIDITY
LIQUIDITY	63	89	82	92
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	46	94	46	45

Last update of Safety Rank: 26-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Merck (USA) and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	27	57	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	83	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	96	96	^new
MARKET PULSE
MARKET PULSE	n/a	72	74	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	96	88	^new

Last update of Sentiment Rank: 26-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Merck (USA).
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