Latest Ratios: P/E Ratio 17.7x · EV/EBITDA 12.1x · ROE 36.9%. (1996–2025 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $318.3B | $263.9B | $252.8B | $277.7B | $282.0B | $194.5B | $198.2B | $223.7B | $195.2B | $147.4B | $156.4B |
| Enterprise Value | $354.2B | $299.9B | $277.8B | $307.1B | $301.3B | $221.0B | $223.6B | $241.4B | $212.3B | $165.7B | $174.8B |
| P/E Ratio → | 17.70 | 14.46 | 14.76 | 778.71 | 19.43 | 14.91 | 28.06 | 22.70 | 31.41 | 57.69 | 27.51 |
| P/S Ratio | 4.90 | 4.06 | 3.94 | 4.62 | 4.76 | 3.99 | 4.77 | 5.72 | 4.62 | 3.67 | 3.93 |
| P/B Ratio | 6.13 | 5.01 | 5.45 | 7.38 | 6.12 | 5.08 | 7.80 | 8.60 | 7.26 | 4.26 | 3.88 |
| P/FCF | 25.75 | 21.35 | 13.97 | 30.37 | 19.18 | 20.13 | 34.03 | 22.45 | 23.50 | 32.31 | 17.85 |
| P/OCF | 19.32 | 16.02 | 11.77 | 21.35 | 14.77 | 13.79 | 19.33 | 16.65 | 17.87 | 22.87 | 15.08 |
P/E links to full P/E history page with 30-year chart
Enterprise-value multiples — capital-structure-neutral measures of total business value
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 4.62 | 4.33 | 5.11 | 5.08 | 4.54 | 5.38 | 6.17 | 5.02 | 4.13 | 4.39 |
| EV / EBITDA | 12.08 | 10.23 | 11.24 | 44.99 | 13.58 | 13.47 | 24.75 | 21.49 | 15.79 | 14.45 | 15.93 |
| EV / EBIT | 15.08 | 13.37 | 13.10 | 101.19 | 17.31 | 15.05 | 33.40 | 19.54 | 22.42 | 22.78 | 32.65 |
| EV / FCF | — | 24.26 | 15.35 | 33.59 | 20.49 | 22.88 | 38.39 | 24.22 | 25.56 | 36.32 | 19.95 |
Margins and return-on-capital ratios measuring operating efficiency
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 72.0% | 72.0% | 76.3% | 73.2% | 70.6% | 72.0% | 67.2% | 69.3% | 68.1% | 67.8% | 64.8% |
| Operating Margin | 36.2% | 36.2% | 31.5% | 4.9% | 30.8% | 27.1% | 13.4% | 20.3% | 21.1% | 16.9% | 13.8% |
| Net Profit Margin | 28.1% | 28.1% | 26.7% | 0.6% | 24.5% | 26.8% | 17.0% | 25.2% | 14.7% | 6.0% | 9.8% |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE | 36.9% | 36.9% | 40.8% | 0.9% | 34.4% | 41.0% | 27.5% | 37.2% | 20.2% | 6.4% | 9.2% |
| ROA | 14.4% | 14.4% | 15.3% | 0.3% | 13.5% | 13.2% | 8.0% | 11.8% | 7.3% | 2.6% | 4.0% |
| ROIC | 22.0% | 22.0% | 21.9% | 3.3% | 21.1% | 17.1% | 8.8% | 13.6% | 13.8% | 9.1% | 6.8% |
| ROCE | 23.8% | 23.8% | 23.8% | 3.6% | 21.9% | 18.1% | 8.8% | 12.9% | 13.8% | 9.2% | 6.8% |
Solvency and debt-coverage ratios — lower is generally safer
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 0.96 | 0.96 | 0.83 | 0.96 | 0.69 | 0.91 | 1.32 | 1.05 | 0.93 | 0.71 | 0.62 |
| Debt / EBITDA | 1.72 | 1.72 | 1.55 | 5.31 | 1.44 | 2.11 | 3.70 | 2.43 | 1.87 | 2.13 | 2.26 |
| Net Debt / Equity | — | 0.68 | 0.54 | 0.78 | 0.42 | 0.69 | 1.00 | 0.68 | 0.64 | 0.53 | 0.45 |
| Net Debt / EBITDA | 1.23 | 1.23 | 1.01 | 4.31 | 0.87 | 1.62 | 2.81 | 1.57 | 1.28 | 1.60 | 1.67 |
| Debt / FCF | — | 2.91 | 1.38 | 3.22 | 1.31 | 2.75 | 4.36 | 1.77 | 2.06 | 4.01 | 2.09 |
| Interest Coverage | 16.52 | 16.52 | 16.69 | 2.65 | 18.09 | 18.22 | 8.06 | 13.84 | 12.27 | 9.65 | 7.72 |
Short-term solvency ratios and asset-utilisation metrics
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | 1.54 | 1.54 | 1.36 | 1.25 | 1.47 | 1.27 | 1.02 | 1.24 | 1.17 | 1.33 | 1.78 |
| Quick Ratio | 1.30 | 1.30 | 1.15 | 1.00 | 1.23 | 1.02 | 0.81 | 0.97 | 0.92 | 1.06 | 1.50 |
| Cash Ratio | 0.51 | 0.51 | 0.48 | 0.28 | 0.54 | 0.34 | 0.29 | 0.47 | 0.40 | 0.46 | 0.83 |
| Asset Turnover | — | 0.47 | 0.55 | 0.56 | 0.54 | 0.46 | 0.45 | 0.46 | 0.51 | 0.46 | 0.42 |
| Inventory Turnover | 2.73 | 2.73 | 2.49 | 2.54 | 2.95 | 2.29 | 2.45 | 2.01 | 2.48 | 2.53 | 2.88 |
| Days Sales Outstanding | — | 71.28 | 58.46 | 62.84 | 58.18 | 69.17 | 59.81 | 63.24 | 61.02 | 62.53 | 64.35 |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | 2.5% | 3.1% | 3.1% | 2.7% | 2.5% | 3.4% | 3.1% | 2.5% | 2.6% | 3.5% | 3.3% |
| Payout Ratio | 44.8% | 44.8% | 45.8% | 2039.7% | 48.3% | 50.7% | 87.9% | 57.9% | 83.2% | 215.8% | 130.7% |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 5.6% | 6.9% | 6.8% | 0.1% | 5.1% | 6.7% | 3.6% | 4.4% | 3.2% | 1.7% | 3.6% |
| FCF Yield | 3.9% | 4.7% | 7.2% | 3.3% | 5.2% | 5.0% | 2.9% | 4.5% | 4.3% | 3.1% | 5.6% |
| Buyback Yield | 1.6% | 1.9% | 0.5% | 0.5% | 0.0% | 0.4% | 0.6% | 2.1% | 4.7% | 2.7% | 2.2% |
| Total Shareholder Yield | 4.1% | 5.0% | 3.6% | 3.2% | 2.5% | 3.8% | 3.8% | 4.7% | 7.3% | 6.2% | 5.5% |
| Shares Outstanding | — | $2.5B | $2.5B | $2.5B | $2.5B | $2.5B | $2.5B | $2.6B | $2.7B | $2.7B | $2.8B |
Keytruda patent cliff exposure
Based on reported figures, Merck's forward P/E of 24.98 suggests the market is pricing in significant growth expectations despite the looming 2028 patent expiration, a valuation that appears elevated compared to the TTM P/E of 17.63 and historical averages for the broader pharmaceutical sector.
The divergence between TTM and forward multiples indicates that investors are currently paying a premium for anticipated pipeline contributions, specifically from recent acquisitions. This valuation warrants caution, as it implies that the market expects successful commercialization of new assets to offset the eventual revenue decline of its core oncology franchise.
As reported in financial statements, Merck's ROIC has exhibited significant volatility, dropping to -1.6% in 2026Q1 from a peak of 7.4% in 2025Q3, which suggests that aggressive capital deployment into M&A is currently diluting the company's ability to generate efficient returns on invested capital.
The recent decline in ROIC appears to be a direct consequence of heavy acquisition-related intangible amortization and upfront R&D costs. Investors should monitor whether these investments can eventually drive margin expansion, as current returns remain below the levels typically required to justify such high-stakes capital allocation.
According to recent SEC filings, Merck's cash conversion cycle has remained elevated, peaking at 143 days in 2026Q1, which indicates that the company's working capital efficiency is being hampered by prolonged inventory holding periods and a complex global supply chain for its biologic products.
The persistent length of the CCC suggests that Merck may be carrying excess inventory to mitigate supply chain risks, which ties up significant liquidity. This inefficiency appears structural rather than temporary, potentially limiting the company's ability to optimize cash flow during periods of high R&D spending.
Based on reported figures, Merck's debt-to-equity ratio has fluctuated between 0.72 and 1.07 over the last ten quarters, suggesting that while leverage is increasing to fund external growth, the company maintains a healthy balance sheet relative to its large-cap pharmaceutical peers.
The company's ability to maintain interest coverage ratios above 13x in most periods indicates that debt service remains comfortable despite the recent uptick in borrowing. However, the trend toward higher leverage warrants investigation, as it may limit future financial flexibility if the pipeline fails to deliver expected returns.
As indicated by the financial data, the P/E ratio is frequently misapplied to Merck, as it fails to account for the massive, non-cash amortization of intangible assets resulting from recent acquisitions that artificially depress reported earnings and distort the company's true underlying profitability.
Investors should instead focus on EV/EBITDA or free cash flow yield, which provide a clearer picture of the company's operational cash-generating capacity. Relying solely on P/E may lead to an inaccurate assessment of the company's valuation, as it ignores the significant cash-flow-generating potential of the Animal Health segment.
Includes 30+ ratios · 30 years · Updated daily
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Quick answers to the most common questions about buying MRK stock.
Merck & Co., Inc.'s current P/E ratio is 17.7x. The historical average is 25.8x. This places it at the 36th percentile of its historical range.
Merck & Co., Inc.'s current EV/EBITDA is 12.1x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 15.0x.
Merck & Co., Inc.'s return on equity (ROE) is 36.9%. This is above the typical threshold of 15-20% considered good for most companies. The historical average is 24.9%.
Based on historical data, Merck & Co., Inc. is trading at a P/E of 17.7x. This is at the 36th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
Merck & Co., Inc.'s current dividend yield is 2.53% with a payout ratio of 44.8%.
Merck & Co., Inc. has 72.0% gross margin and 36.2% operating margin. Operating margin above 20% indicates strong pricing power and cost efficiency.
Merck & Co., Inc.'s Debt/EBITDA ratio is 1.7x, indicating moderate leverage. A ratio below 2x is generally considered financially healthy.