The business behind the dividend
| Measure | MRK | Median | Formula |
|---|---|---|---|
| Return on equity | 34.7% | 11.7% | Net income ÷ shareholders’ equity |
| Return on capital employed | 20.7% | 10.1% | Operating income ÷ (equity + total debt) |
| Owner earnings | $17.19bn | $632.00m | Net income + depreciation & amortisation − capital expenditure |
| Free cash flow | $12.36bn | $746.10m | Operating cash flow − capital expenditure |
| Operating margin | 32.4% | 15.0% | Operating income ÷ revenue |
| Net margin | 28.1% | 10.2% | Net income ÷ revenue |
| Debt to equity | 0.93x | 0.79x | Total debt ÷ shareholders’ equity |
| Interest cover | 15.52x | 4.43x | Operating income ÷ interest expense |
| Current ratio | 1.54x | 1.25x | Current assets ÷ current liabilities |
| Long-term debt to working capital | 3.08x | 2.30x | Long-term debt ÷ (current assets − current liabilities) |
| Cash conversion | 0.90x | 1.78x | Operating cash flow ÷ net income |
Ten years of it
The same measures, for every year the filings support. One year is a fact; a row is a business.
| Measure | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | Median |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Return on equity | 34.7% | 37.0% | 1.0% | 31.6% | 34.2% | 27.9% | 38.0% | 23.3% | 7.0% | 9.8% | 27.9% |
| Return on capital employed | 20.7% | 23.9% | 2.6% | 21.5% | 19.5% | 11.1% | 14.2% | 16.8% | 11.1% | 7.2% | 14.2% |
| Operating margin | 32.4% | 31.1% | 3.1% | 27.7% | 28.5% | 14.1% | 18.3% | 20.6% | 16.3% | 11.7% | 18.3% |
| Net margin | 28.1% | 26.7% | 0.6% | 24.5% | 26.8% | 17.0% | 25.2% | 14.7% | 6.0% | 9.8% | 17.0% |
| Debt to equity | 0.93x | 0.80x | 0.93x | 0.66x | 0.86x | 1.09x | 0.95x | 0.94x | 0.71x | 0.61x | 0.86x |
| Current ratio | 1.54x | 1.36x | 1.25x | 1.47x | 1.27x | 1.02x | 1.24x | 1.17x | 1.33x | 1.78x | 1.27x |
| Cash conversion | 0.90x | 1.25x | 35.63x | 1.32x | 1.01x | 1.45x | 1.37x | 1.76x | 2.69x | 2.65x | 1.37x |
How it compares in health care
Among the 38 health care companies here measured on free cash flow, Merck pays out less than 6 of them. The median for that group is 39.3%, against this company’s 66.1%.
Closest on free cash flow
- Johnson & Johnson (JNJ) 62.9%
- Amgen (AMGN) 63.3%
- AbbVie (ABBV) 65.4%
- Medtronic (MDT) 67.1%
Same sector and same denominator, so the figures are comparable. All 44 in health care →