NYSE · Healthcare

Merck & Co., Inc.

MRK · Drug Manufacturers - General

$113.24

▲ 1.08 (0.96%)

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Mr. Market is currently offering Merck & Co., Inc. at $113.24.

The business passes only 3 of 7 of Graham's defensive criteria — well below his required standard.

Overall Grade

Defensive

Enterprising

Profitability A

Gross Profit Margin 74.8%

Operating Margin 34.0%

Net Income Margin 28.1%

Fin. Health C

Years to Pay Off Debt 2.7 yrs

Working Capital vs Long-Term Debt -$31.6B

Working Capital $15.2B

Valuation F

Margin of Safety 0.0%

Price-to-Book 5.32x

Cash Flow B

Free Cash Flow $12.4B

CapEx % of Net Income 22.5%

Owner Earnings $28.2B

3/7

Graham Score

Speculative

Defensive — Graham's strict criteria (P/B, P/E, dividends, stability) · Enterprising — Profitability & cash flow focused, accepts higher valuations for quality

Market Data

Market Cap $279.7B

Enterprise Value $313.3B

P/E (TTM) 31.81

Dividend Yield 2.92%

Exchange NYSE

Key Margins

Gross Profit 74.8%

Operating Margin 34.0%

Net Margin 28.1%

Company Info

Sector Healthcare

Industry Drug Manufacturers - General

Employees 73000

Country United States

Visit website

📖

Full Graham Analysis

Mr. Market is currently offering Merck & Co., Inc. at $113.24.

The business passes only 3 of 7 of Graham's defensive criteria — well below his required standard.

At $113.24, the stock trades at a 92% premium to its Graham Number of $59.07. Graham would consider this price speculative.

There is no margin of safety at the current price. Graham would advise patience and waiting for a better entry point.

Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign..

Conclusion: By Graham's standards, this stock is speculative at its current price. The intelligent investor would look elsewhere or wait.

About Merck & Co., Inc.

Merck & Co., Inc. operates as a healthcare company worldwide. It offers human health pharmaceutical for various areas under the Keytruda, Keytruda Qlex, Welireg, Gardasil, ProQuad, M-M-R II, Varivax, Vaxneuvance, Capvaxive, RotaTeq, Pneumovax 23, Bridion, Prevymis, Dificid, Zerbaxa, Winrevair, Adempas/ Verquvo, Ohtuvayre, Lagevrio, Isentress/Isentress HD, Delstrigo, Pifeltro, Belsomra, Januvia, and Janumet brands. The company also provides veterinary pharmaceuticals, vaccines and health management solutions and services, such as livestock products under the Nuflor, Bovilis/Vista, Bovilis Cryptium, Banamine, Estrumate, Matrix, Resflor, Zuprevo, Revalor, Safe-Guard, M+Pac, Porcilis, Circumvent, Nobilis/Innovax, Paracox and Coccivac, Exzolt, Slice, Imvixa, Clynav, Aquavac/Norvax, Aquaflor, Flexolt brands; Allflex Livestock Intelligence solutions; and companion animal products under the Bravecto One-Month, Bravecto Injectable/Quantum, Bravecto TriUNO, Bravecto Plus, Sentinel Spectrum, Sentinel Flavor Tabs, Numelvi, Optimmune, Nobivac NXT, GilvetMab, Otomax, Mometamax, Mometamax Ultra, Posatex, Caninsulin/Vetsulin, Panacur, Safeguard, Regumate, Prestige, Scalibor/Exspot, Sure Petcare, and Home Again brands. It has development and commercialization agreement for three of Daiichi Sankyo's deruxtecan ADC candidates; AstraZeneca PLC to co-development and co-commercialize AstraZeneca's Lynparza products for multiple cancer types; licensed to develop, manufacture and commercialize LM-299, a novel investigational PD-1/VEGF bispecific antibody from LaNova; and collaboration agreement with Eisai Co., Ltd., Bayer AG, and Ridgeback Biotherapeutics LP, as well Moderna, Inc. Merck & Co., Inc. has strategic collaboration with Infinimmune, Inc. to discover and develop antibodies against multiple therapeutic targets. The company was founded in 1891 and is headquartered in Rahway, New Jersey.

Showing Key Metrics

Income Highlights

Metric	2025	2024	2023	2022	2021
Gross Profit %	74.8% ▼	76.3%	73.2%	70.6%	N/A
Operating Margin %	34.0% ▲	31.5%	4.9%	30.8%	N/A
Net Income %	28.1% ▲	26.7%	0.6%	24.5%	N/A
Diluted EPS	7.28 ▲	6.74	0.14	5.71	N/A

Balance Sheet Highlights

Metric	2025	2024	2023	2022	2021
Total Assets	$136.9B	$117.1B	$106.7B	$109.2B	N/A
Total Debt	$49.3B ↑	$37.1B	$35.1B	$30.7B	N/A
Working Capital	$15.2B ▲	$10.4B	$6.5B	$11.5B	N/A
Years to Pay Debt	2.70	2.17	96.04	2.11	N/A

Cash Flow Highlights

Metric	2025	2024	2023	2022	2021
Free Cash Flow	$12.4B ▼	$18.1B	$9.1B	$14.7B	N/A
Owner Earnings	$28.2B	$25.0B	$8.1B	$22.8B	N/A
CapEx % of Net Income	22.5%	19.7%	1,058.4%	30.2%	N/A

Income Statement

	2025	2024	2023	2022	2021
Tax Effect Of Unusual Items	-112,336	-73,393	-132,090	-233,181
Tax Rate For Calcs	0	0	0	0
Normalized EBITDA	29,106,000	26,228,000	7,536,000	23,308,000
Total Unusual Items	-844,000	-522,000	-629,000	-1,993,000
Total Unusual Items Excluding Goodwill	-844,000	-522,000	-629,000	-1,993,000
Net Income From Continuing Operation Net Minority Interest	18,254,000	17,117,000	365,000	14,519,000
Reconciled Depreciation	5,838,000	4,499,000	3,872,000	3,909,000
Reconciled Cost Of Revenue	16,382,000	15,193,000	16,126,000	17,411,000
EBITDA	28,262,000	25,706,000	6,907,000	21,315,000
EBIT	22,424,000	21,207,000	3,035,000	17,406,000
Net Interest Income	-1,014,000	-856,000	-781,000	-805,000
Interest Expense	1,357,000	1,271,000	1,146,000	962,000
Interest Income	343,000	415,000	365,000	157,000
Normalized Income	18,985,664	17,565,607	861,910	16,278,819
Net Income From Continuing And Discontinued Operation	18,254,000	17,117,000	365,000	14,519,000
Total Expenses	42,904,000	43,947,000	57,161,000	41,001,000
Diluted Average Shares	2,507,000	2,541,000	2,607,143	2,542,000
Basic Average Shares	2,474,627	2,527,637	2,607,143	2,532,000
Diluted EPS	0	0	0	0
Basic EPS	0	0	0	0
Diluted NI Availto Com Stockholders	18,254,000	17,117,000	365,000	14,519,000
Net Income Common Stockholders	18,254,000	17,117,000	365,000	14,519,000
Net Income	18,254,000	17,117,000	365,000	14,519,000
Minority Interests	-9,000	-16,000	-12,000	-7,000
Net Income Including Noncontrolling Interests	18,263,000	17,133,000	377,000	14,526,000
Net Income Discontinuous Operations			0	0	704,000
Net Income Continuous Operations	18,263,000	17,133,000	377,000	14,526,000
Tax Provision	2,804,000	2,803,000	1,512,000	1,918,000
Pretax Income	21,067,000	19,936,000	1,889,000	16,444,000
Other Income Expense	-26,000	571,000	-284,000	-1,033,000
Other Non Operating Income Expenses	818,000	1,093,000	345,000	960,000
Special Income Charges	-889,000	-309,000	-599,000	-337,000
Restructuring And Mergern Acquisition	889,000	309,000	599,000	337,000
Gain On Sale Of Security	45,000	-213,000	-30,000	-1,656,000
Net Non Operating Interest Income Expense	-1,014,000	-856,000	-781,000	-805,000
Interest Expense Non Operating	1,357,000	1,271,000	1,146,000	962,000
Interest Income Non Operating	343,000	415,000	365,000	157,000
Operating Income	22,107,000	20,221,000	2,954,000	18,282,000
Operating Expense	26,522,000	28,754,000	41,035,000	23,590,000
Research And Development	15,789,000	17,938,000	30,531,000	13,548,000
Selling General And Administration	10,733,000	10,816,000	10,504,000	10,042,000
Gross Profit	48,629,000	48,975,000	43,989,000	41,872,000
Cost Of Revenue	16,382,000	15,193,000	16,126,000	17,411,000
Total Revenue	65,011,000	64,168,000	60,115,000	59,283,000
Operating Revenue	65,011,000	64,168,000	60,115,000	59,283,000

Balance Sheet

	2025	2024	2023	2022
Treasury Shares Number	1,102,477	1,049,466	1,045,470	1,039,270
Ordinary Shares Number	2,474,627	2,527,637	2,531,633	2,537,834
Share Issued	3,577,104	3,577,104	3,577,104	3,577,104
Net Debt	34,774,000	23,869,000	28,214,000	17,997,000
Total Debt	49,339,000	37,111,000	35,055,000	30,691,000
Tangible Book Value	4,346,000	8,275,000	-1,627,000	4,518,000
Invested Capital	101,945,000	83,424,000	72,636,000	76,682,000
Working Capital	15,189,000	10,362,000	6,474,000	11,483,000
Net Tangible Assets	4,346,000	8,275,000	-1,627,000	4,518,000
Common Stock Equity	52,606,000	46,313,000	37,581,000	45,991,000
Total Capitalization	99,356,000	80,775,000	71,264,000	74,736,000
Total Equity Gross Minority Interest	52,662,000	46,372,000	37,635,000	46,058,000
Minority Interest	56,000	59,000	54,000	67,000
Stockholders Equity	52,606,000	46,313,000	37,581,000	45,991,000
Gains Losses Not Affecting Retained Earnings	-4,287,000	-4,945,000	-5,161,000	-4,768,000
Other Equity Adjustments	-4,287,000	-4,945,000	-5,161,000	-4,768,000
Treasury Stock	62,999,000	58,303,000	57,450,000	56,489,000
Retained Earnings	73,075,000	63,069,000	53,895,000	61,081,000
Additional Paid In Capital	45,029,000	44,704,000	44,509,000	44,379,000
Capital Stock	1,788,000	1,788,000	1,788,000	1,788,000
Common Stock	1,788,000	1,788,000	1,788,000	1,788,000
Total Liabilities Net Minority Interest	84,204,000	70,734,000	69,040,000	63,102,000
Total Non Current Liabilities Net Minority Interest	55,877,000	42,314,000	43,346,000	38,863,000
Other Non Current Liabilities	7,688,000	6,465,000	8,792,000	8,323,000
Non Current Deferred Liabilities	1,439,000	1,387,000	871,000	1,795,000
Non Current Deferred Taxes Liabilities	1,439,000	1,387,000	871,000	1,795,000
Long Term Debt And Capital Lease Obligation	46,750,000	34,462,000	33,683,000	28,745,000
Long Term Debt	46,750,000	34,462,000	33,683,000	28,745,000
Current Liabilities	28,327,000	28,420,000	25,694,000	24,239,000
Current Debt And Capital Lease Obligation	2,589,000	2,649,000	1,372,000	1,946,000
Current Debt	2,589,000	2,649,000	1,372,000	1,946,000
Payables And Accrued Expenses	25,738,000	25,771,000	24,322,000	22,293,000
Current Accrued Expenses	14,468,000	15,694,000	15,766,000	14,159,000
Payables	11,270,000	10,077,000	8,556,000	8,134,000
Dividends Payable	2,140,000	2,084,000	1,985,000	1,884,000
Total Tax Payable	4,726,000	3,914,000	2,649,000	1,986,000
Income Tax Payable	4,726,000	3,914,000	2,649,000	1,986,000
Accounts Payable	4,404,000	4,079,000	3,922,000	4,264,000
Total Assets	136,866,000	117,106,000	106,675,000	109,160,000
Total Non Current Assets	93,350,000	78,324,000	74,507,000	73,438,000
Other Non Current Assets	18,818,000	16,044,000	11,996,000	9,528,000
Investments And Advances	956,000	463,000	252,000	1,015,000
Investmentin Financial Assets	956,000	463,000	252,000
Available For Sale Securities	956,000	463,000	252,000
Trading Securities		463,000	252,000
Goodwill And Other Intangible Assets	48,260,000	38,038,000	39,208,000	41,473,000
Other Intangible Assets	26,681,000	16,370,000	18,011,000	20,269,000
Goodwill	21,579,000	21,668,000	21,197,000	21,204,000
Net PPE	25,316,000	23,779,000	23,051,000	21,422,000
Accumulated Depreciation	-21,914,000	-19,155,000	-18,266,000	-17,985,000
Gross PPE	47,230,000	42,934,000	41,317,000	39,407,000
Construction In Progress	9,166,000	7,984,000	8,262,000	9,186,000
Machinery Furniture Equipment	19,760,000	18,283,000	17,763,000	16,760,000
Buildings And Improvements	17,983,000	16,360,000	14,966,000	13,166,000
Land And Improvements	321,000	307,000	326,000	295,000
Current Assets	43,516,000	38,782,000	32,168,000	35,722,000
Other Current Assets	10,518,000	8,706,000	8,368,000	7,169,000
Inventory	6,658,000	6,109,000	6,358,000	5,911,000
Receivables	11,775,000	10,278,000	10,349,000	9,450,000
Accounts Receivable	11,775,000	10,278,000	10,349,000	9,450,000
Allowance For Doubtful Accounts Receivable	-97,000	-89,000	-88,000	-72,000
Gross Accounts Receivable	11,872,000	10,367,000	10,437,000	9,522,000
Cash Cash Equivalents And Short Term Investments	14,565,000	13,689,000	7,093,000	13,192,000
Other Short Term Investments	0	447,000	252,000	498,000
Cash And Cash Equivalents	14,565,000	13,242,000	6,841,000	12,694,000

Cash Flow

	2025	2024	2023	2022	2021
Free Cash Flow	12,360,000	18,096,000	9,143,000	14,707,000
Repurchase Of Capital Stock	-5,084,000	-1,306,000	-1,346,000	0
Repayment Of Debt	-2,503,000	-1,290,000	-1,755,000	-2,251,000
Issuance Of Debt	13,880,000	3,599,000	5,939,000	0
Capital Expenditure	-4,112,000	-3,372,000	-3,863,000	-4,388,000
End Cash Position	14,690,000	13,318,000	6,909,000	12,773,000
Beginning Cash Position	13,318,000	6,909,000	12,773,000	8,167,000
Effect Of Exchange Rate Changes	563,000	-293,000	23,000	-410,000
Changes In Cash	809,000	6,702,000	-5,887,000	5,016,000
Financing Cash Flow	-1,922,000	-7,032,000	-4,810,000	-9,119,000
Cash From Discontinued Financing Activities			0	0	-504,000
Cash Flow From Continuing Financing Activities	-1,922,000	-7,032,000	-4,810,000	-9,119,000
Net Other Financing Charges	-131,000	-372,000	-328,000	-240,000
Proceeds From Stock Option Exercised	92,000	177,000	125,000	384,000
Cash Dividends Paid	-8,176,000	-7,840,000	-7,445,000	-7,012,000
Common Stock Dividend Paid	-8,176,000	-7,840,000	-7,445,000	-7,012,000
Net Common Stock Issuance	-5,084,000	-1,306,000	-1,346,000	0
Common Stock Payments	-5,084,000	-1,306,000	-1,346,000	0
Net Issuance Payments Of Debt	11,377,000	2,309,000	4,184,000	-2,251,000
Net Short Term Debt Issuance			0	0	-3,986,000
Net Long Term Debt Issuance	11,377,000	2,309,000	4,184,000	-2,251,000
Long Term Debt Payments	-2,503,000	-1,290,000	-1,755,000	-2,251,000
Long Term Debt Issuance	13,880,000	3,599,000	5,939,000	0
Investing Cash Flow	-13,741,000	-7,734,000	-14,083,000	-4,960,000
Cash From Discontinued Investing Activities			0	0	-134,000
Cash Flow From Continuing Investing Activities	-13,741,000	-7,734,000	-14,083,000	-4,960,000
Net Other Investing Changes	-58,000	-127,000	-36,000	-89,000
Net Investment Purchase And Sale	471,000	-142,000	1,848,000	-483,000
Sale Of Investment	1,678,000	377,000	2,803,000	721,000
Purchase Of Investment	-1,207,000	-519,000	-955,000	-1,204,000
Net Business Purchase And Sale	-10,042,000	-4,093,000	-12,032,000	0
Purchase Of Business	-10,042,000	-4,093,000	-12,032,000	0
Capital Expenditure Reported	-4,112,000	-3,372,000	-3,863,000	-4,388,000
Operating Cash Flow	16,472,000	21,468,000	13,006,000	19,095,000
Cash From Discontinued Operating Activities			0	0	987,000
Cash Flow From Continuing Operating Activities	16,472,000	21,468,000	13,006,000	19,095,000
Change In Working Capital	-6,976,000	-3,667,000	-2,205,000	-2,782,000
Change In Other Working Capital	-3,307,000	-1,416,000	-2,314,000	-1,473,000
Change In Other Current Liabilities	195,000	-49,000	456,000	-545,000
Change In Payables And Accrued Expense	-1,594,000	-1,123,000	1,617,000	41,000
Change In Accrued Expense	-1,841,000	-2,328,000	1,783,000	-50,000
Change In Payable	247,000	1,205,000	-166,000	91,000
Change In Account Payable	110,000	182,000	-380,000	-289,000
Change In Tax Payable	137,000	1,023,000	214,000	380,000
Change In Income Tax Payable	137,000	1,023,000	214,000	380,000
Change In Inventory	-1,180,000	-835,000	-816,000	-161,000
Change In Receivables	-1,090,000	-244,000	-1,148,000	-644,000
Changes In Account Receivables	-1,090,000	-244,000	-1,148,000	-644,000
Other Non Cash Items	511,000	3,966,000	11,764,000	1,301,000
Stock Based Compensation	820,000	761,000	645,000	541,000
Asset Impairment Charge	55,000	39,000	792,000	1,749,000
Deferred Tax	-1,671,000	-1,249,000	-1,899,000	-1,568,000
Deferred Income Tax	-1,671,000	-1,249,000	-1,899,000	-1,568,000
Depreciation Amortization Depletion	5,838,000	4,499,000	3,872,000	3,909,000
Depreciation And Amortization	5,838,000	4,499,000	3,872,000	3,909,000
Amortization Cash Flow	2,793,000	2,395,000	2,044,000	2,085,000
Amortization Of Intangibles	2,793,000	2,395,000	2,044,000	2,085,000
Depreciation	3,045,000	2,104,000	1,828,000	1,824,000
Operating Gains Losses	-368,000	-14,000	-340,000	1,419,000
Earnings Losses From Equity Investments			-340,000	1,419,000	-1,940,000
Gain Loss On Investment Securities	-368,000	-14,000	-340,000	1,419,000
Net Income From Continuing Operations	18,263,000	17,133,000	377,000	14,526,000

These metrics estimate what Merck & Co., Inc. is worth based on its fundamentals — independent of what the market currently prices it at. Graham's Fair Value and NCAV are conservative floors rooted in 1930s–60s principles. EPV assumes zero growth. None are price targets — they are reference points for judging whether the current price offers a margin of safety.

Graham's Fair Value

$59.07

Margin of Safety

Market Cap ÷ Company Value

1.89

P/B Ratio

5.32

Warren's Owner Earnings

$28.2B

Latest fiscal year

Graham's 7 Criteria

Defensive Investor Checklist

3/7 — Speculative Investor

✅ Adequate Size

$65.0B

vs > $1.5B revenue

❌ Strong Financial Condition

1.54x

vs Current Ratio > 2.0x

✅ Earnings Stability

No loss years (4 yrs data)

vs No negative EPS years

✅ Dividend Record

2.92%

vs Uninterrupted dividends

❌ Earnings Growth

+27.5% EPS growth

vs > 33% EPS growth

❌ Moderate P/E Ratio

31.8x

vs P/E ≤ 15.0x

❌ Moderate Price-to-Book

5.32x P/B (P/E×P/B: 169.1)

vs P/B ≤ 1.5x | P/E × P/B ≤ 22.5

Net Current Asset Value

$-16.47

Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign.

"Buy at two-thirds of net current assets." — Graham

Earnings Power Value

$99.45

Per share, no-growth floor. Compare to current price.

Cash Flow Analysis

Metric	2025	2024	2023	2022	2021
Capital Expenditure % of Net Income	22.5%	19.7%	1,058.4%	30.2%	N/A
Repurchase of Capital Stock	-$5.1B	-$1.3B	-$1.3B	$0M	N/A
Free Cash Flow	$12.4B ▼	$18.1B ▲	$9.1B ▼	$14.7B •	N/A •
Warren's Owner Earnings	$28.2B	$25.0B	$8.1B	$22.8B	N/A

Peers & Industry

No auto-detected peers for Drug Manufacturers - General. You can manually compare MRK against any stock using the Compare tool.

"The management of a business is its most important single factor — more important than market position, patents, or financial structure."

— Benjamin Graham

Capital Allocation & Alignment

Insider Ownership

0.06%

Low — management has little skin in the game

Return on Equity (ROE)

34.7%

Excellent — management generates strong returns on equity

Return on Assets (ROA)

13.3%

Strong — management uses assets efficiently

Share Buybacks (Latest Year)

$5.1B

Management is returning capital to shareholders via buybacks

Debt Trend YoY

+32.9% YoY

Debt is growing — management is leveraging up

Leadership Team

Robert Davis

Chairman, President & CEO

Age 58

Pay: $4,629,860

0.025% of net income

Caroline Litchfield

Executive VP & CFO

Age 56

Pay: $2,400,632

0.013% of net income

Sanat Chattopadhyay

Executive VP & President of Merck Manufacturing Division

Age 65

Pay: $2,094,079

0.011% of net income

Dean Li , Ph.

Executive VP & President of Merck Research Laboratories

Age 62

Pay: $2,997,187

0.016% of net income

Peter Dannenbaum

Vice President of Investor Relations

Top Institutional Holders

Institution	% Owned	Shares
Vanguard Group Inc	10.30%	254,322,763
Blackrock Inc.	8.87%	219,095,465
State Street Corporation	4.86%	120,040,168
Wellington Management Group, LLP	3.50%	86,435,458
Geode Capital Management, LLC	2.43%	60,047,984
Charles Schwab Investment Management, Inc.	1.97%	48,563,804
Morgan Stanley	1.82%	44,946,021
FMR, LLC	1.65%	40,836,566

Risk Analysis

Beta (Market Risk)

0.20

Low volatility — more stable than the market

Short Interest

1.1% of float

Low short interest — market is not heavily bearish

Debt-to-Equity

0.96x

Conservative balance sheet — low financial risk

52-Week Price Range

Low: $73.31 Current: $113.24 High: $125.14

Currently at 77% of 52-week range

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