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Analysis of Merck & Co, one of the world’s largest healthcare companies.

Analysis of Merck & Co, one of the world’s largest healthcare companies.

19 January 2021

Merck & Co is one of the world’s largest healthcare companies. The history of the company is rich enough. For example, it was Merck & Co who synthesized vitamin B for the first time and launched the mass production of the vitamin. The company has also developed a drug against rheumatoid arthritis. More than 15% of the company’s staff work directly on research and development. The company’s product basket currently contains more than 90 drugs already sold around the world. Also, more than 50 drugs are undergoing various phases of testing.

The company is also in the race for the COVID-19 vaccine, but is currently lagging behind its main competitors, Pfizer and Moderna. However, Merck & Co plans to develop a vaccine that is easy to store and easier to vaccinate patients.

The company is a dividend aristocrat and pays out quarterly dividends, with a forward dividend yield of 3.2%.

TTM Revenue: $ 47.3B (+ 1.1% YoY)

TTM Operating Profit: $ 20.5B (+ 1% YoY)

TTM Net Income: $ 11.5B (+ 17% YoY)

Earnings per share last quarter: $ 1.74, higher than the $ 1.44 forecast.

The company’s shares can be considered a defensive asset. Since the company’s balance sheet has shown stability in recent years (low net debt and a large amount of cash in accounts)

Geographic distribution of revenue:

United States – 43.39%

Europe, Middle East and Africa – 27.13%

Japan – 7.65%

China – 6.85%

Asia Pacific – 6.28%

Latin America – 5.27%

Other – 3.43%

Current Quarter EPS Forecast: $ 1.38

The company does not stop developing even during the current crisis. Over the past year, Merck & Co’s management has committed over $ 10B to research and development.

The company attracts investors with fairly stable balance sheets and high margins. If we consider that over the past 5 years, the company’s net profit has increased by 160%, we can see that the company’s securities combine growth potential and a good dividend yield. Also, an important factor in the growth of the company’s stock quotes is the rather frequent buybacks of shares – over the past 9 years, the total number of shares has decreased by almost 20%.


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