Merck & Co.

MRK

Drug Manufacturers - General · Healthcare

Also trades as: 0QAH.L

Winston Score

Winston is serious

Mixed quality — meaningful strengths and weaknesses.

Data as of Aug 23, 2026 · filings through Jun 30, 2026

How the score breaks down

Quality

Mixed

Growth

Weak

Cash Flow

Exceptional

Stability

Good

Valuation

Good

Dividends

Good

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Winston Score History

The full picture

Merck is a large pharmaceutical company that discovers, makes, and sells prescription medicines, vaccines, and animal health products. Its biggest product is Keytruda, a cancer treatment that has become one of the best-selling drugs in the world. Merck sells to hospitals, doctors, pharmacies, and governments across more than 140 countries.

Merck earns most of its revenue by selling branded prescription drugs at negotiated prices to insurers, hospitals, and government health programs. It operates globally, with significant sales in the United States, Europe, and Asia, and generates roughly $60 billion in annual revenue. The company's main competitive advantage is its large portfolio of patented drugs and a deep pipeline of drugs in development. The biggest risk Merck faces is that Keytruda's core patents begin expiring around 2028, which could sharply reduce revenue unless new drugs in its pipeline successfully reach the market.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+5.1% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

-130.7% YoY

YoY Growth Rate

Earnings declining

Insider Activity

0.2%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

$8.4B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

Merck & Co. is growing revenue at 5% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Profit per sale

Gross Margin

73.5%

Premium pricing power — 73.5% gross margin

Profit after running costs

Operating Margin

-4.1%

Losing money on operations — -4.1%

Return on the money invested

ROCE

11.5%

Below par — 11.5% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales growth

Sales YoY

+4.2%

Slow sales growth (+4.2% YoY)

Profit growth

EPS YoY

-80.6%

Earnings shrinking (-80.6% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

How steady the profit is

EPS Consistency

3/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Profit that turns into cash

Cash Conversion

629%

Turns 629% of profit into real cash

Spare cash per sale

FCF Margin

24.2%

Converts sales into free cash efficiently (24.2%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

What it owes vs what it owns

Debt / Equity

1.29

Elevated debt (1.29)

Covers its interest

Interest Cover

8.75x

Comfortably covers interest (8.8x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

Price vs profit

P/E Ratio (TTM)

121.1x

no trend

Expensive — P/E 121.1

P/E over 35. The market is pricing in heavy, sustained growth.

Cheaper or dearer next year

P/E vs Forward

+108.8

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (121.1 → 12.3)

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Dividends

Dividend

Dividend Yield

2.58%

no trend

Moderate income — 2.58% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend record

Dividend Growth

+5.0%

no trend

Dividend growing modestly (5.0% YoY)

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