Brought to you by Validea.com, the Value Stock of the Week provides a detailed report on a company that scores well based on the stock selections strategies of Wall Street’s best investors. Using Validea, investors can analyze over 6,000 US stocks through 12 different guru-based models and get individual reports on each company. ValueWalk has a content agreement with Validea.
Access Validea’s Equity Analysis, Guru Screens and Model Portfolios risk-free today.
Stock of the week for 03/06/2015: Merck & Co., Inc. (MRK)
Global health care firm makes prescription medicines, vaccines, biologic therapies and animal health products, and has customers or operations in more than 140 countries.
The stock gets a 93% score from Validea’s P/E/G Growth Investor model, based on Peter Lynch’s approach outlined in One Up on Wall Street and a 100% score based on the Cornerstone Value model developed by James O’Shaughnessy and outlined in his book, What Works On Wall Street.
Gets strong interest from Peter Lynch model, which likes its reasonable 14.3 P/E and 0.37 P/E-to-Growth ratio.
The stock carries an attractive 3.1% dividend yield.
Merck has a debt/equity ratio of 56%, well below the 133% biotech & drugs industry average, which the Martin Zweig-based model likes.
James O’Shaughnessy-based value model likes its size ($42 billion in TTM sales). The O’Shaughnessy approach also likes its solid dividend and good cash flow ($3.43 per share vs. market mean of $1.80).
The company has an attractive TTM profit margin of 28.5%.
The firm has averaged a return on retained earnings (those not paid out as dividends) of 21.8% over the past decade, impressing the Warren Buffett model.
Click here for a complete breakdown of Validea’s investing guru report.