Merck Price To Sales vs. Profit Margin

MRK Stock  USD 102.00  0.75  0.74%   
Taking into consideration Merck's profitability measurements, Merck Company may not be well positioned to generate adequate gross income at this time. It has a very high probability of underperforming in January. Profitability indicators assess Merck's ability to earn profits and add value for shareholders.

Merck Price To Sales Ratio

4.32

At this time, Merck's Days Sales Outstanding is quite stable compared to the past year. Sales General And Administrative To Revenue is expected to rise to 0.18 this year, although the value of Operating Cash Flow Sales Ratio will most likely fall to 0.20. At this time, Merck's Change To Netincome is quite stable compared to the past year. Income Quality is expected to rise to 37.41 this year, although the value of Total Other Income Expense Net is projected to rise to (1 B).
Current ValueLast YearChange From Last Year 10 Year Trend
Gross Profit Margin0.740.7317
Fairly Up
Slightly volatile
Net Profit Margin0.00580.0061
Notably Down
Pretty Stable
Operating Profit Margin0.04670.0491
Notably Down
Pretty Stable
Pretax Profit Margin0.02990.0314
Notably Down
Pretty Stable
Return On Assets0.00330.0034
Notably Down
Pretty Stable
Return On Equity0.00920.0097
Notably Down
Very volatile
For Merck profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Merck to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Merck Company utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Merck's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Merck Company over time as well as its relative position and ranking within its peers.
  

Merck's Revenue Breakdown by Earning Segment

Check out Correlation Analysis.
Is Pharmaceuticals space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Merck. If investors know Merck will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Merck listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.33)
Dividend Share
3.04
Earnings Share
4.85
Revenue Per Share
24.931
Quarterly Revenue Growth
0.044
The market value of Merck Company is measured differently than its book value, which is the value of Merck that is recorded on the company's balance sheet. Investors also form their own opinion of Merck's value that differs from its market value or its book value, called intrinsic value, which is Merck's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Merck's market value can be influenced by many factors that don't directly affect Merck's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Merck's value and its price as these two are different measures arrived at by different means. Investors typically determine if Merck is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Merck's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Merck Company Profit Margin vs. Price To Sales Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Merck's current stock value. Our valuation model uses many indicators to compare Merck value to that of its competitors to determine the firm's financial worth.
Merck Company is regarded fourth in price to sales category among its peers. It is regarded second in profit margin category among its peers fabricating about  0.05  of Profit Margin per Price To Sales. The ratio of Price To Sales to Profit Margin for Merck Company is roughly  21.08 . At this time, Merck's Price To Sales Ratio is quite stable compared to the past year. Comparative valuation analysis is a catch-all technique that is used if you cannot value Merck by discounting back its dividends or cash flows. It compares the stock's price multiples to nearest competition to determine if the stock is relatively undervalued or overvalued.

Merck Profit Margin vs. Price To Sales

Price to Sales ratio is typically used for valuing equity relative to its own past performance as well as to performance of other companies or market indexes. In most cases, the lower the ratio, the better it is for investors. However, it is advisable for investors to exercise caution when looking at price-to-sales ratios across different industries.

Merck

P/S

 = 

MV Per Share

Revenue Per Share

 = 
4.05 X
The most critical factor to remember is that the price of equity takes a firm's debt into account, whereas the sales indicators do not consider financial leverage. Generally speaking, Price to Sales ratio shows how much market values every dollar of the company's sales.
Profit Margin measures overall efficiency of a company and shows its ability to withstand competition as well as defend against adverse conditions such as rising costs, falling prices, decline in sales or management distress. Profit margin tells investors how well the company executes on its overall pricing strategies as well as how effective the company in controlling its costs.

Merck

Profit Margin

 = 

Net Income

Revenue

X

100

 = 
0.19 %
In a nutshell, Profit Margin indicator shows the amount of money the company makes from total sales or revenue. It can provide a good insight into companies in the same sector, as well as help to identify trends of a company from year to year.

Merck Profit Margin Comparison

Merck is currently under evaluation in profit margin category among its peers.

Merck Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Merck, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Merck will eventually generate negative long term returns. The profitability progress is the general direction of Merck's change in net profit over the period of time. It can combine multiple indicators of Merck, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive Income-5.2 B-4.9 B
Operating IncomeB5.6 B
Income Before Tax1.9 B1.8 B
Total Other Income Expense Net-1.1 B-1 B
Net Income365 M346.8 M
Income Tax Expense1.5 BB
Net Income Applicable To Common Shares16.7 B17.5 B
Net Income From Continuing Ops4.6 BB
Non Operating Income Net Other-1.4 B-1.3 B
Interest Income390 M732.6 M
Net Interest Income-681 M-715 M
Change To Netincome2.3 B2.4 B
Net Income Per Share 0.14  0.13 
Income Quality 35.63  37.41 
Net Income Per E B T 0.19  0.18 

Merck Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Merck. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Merck position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Merck's important profitability drivers and their relationship over time.

Use Merck in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Merck position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Merck will appreciate offsetting losses from the drop in the long position's value.

Merck Pair Trading

Merck Company Pair Trading Analysis

The ability to find closely correlated positions to Merck could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Merck when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Merck - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Merck Company to buy it.
The correlation of Merck is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Merck moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Merck Company moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Merck can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Merck position

In addition to having Merck in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

Did You Try This Idea?

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Financials ETFs
Financials ETFs Theme
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When determining whether Merck Company is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if Merck Stock is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about Merck Company Stock. Highlighted below are key reports to facilitate an investment decision about Merck Company Stock:
To fully project Merck's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Merck Company at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Merck's income statement, its balance sheet, and the statement of cash flows.
Potential Merck investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Merck investors may work on each financial statement separately, they are all related. The changes in Merck's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Merck's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.