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Merck & Co., Inc. (0QAH.L)

Company Dividend Discount ModelIndustry: Drug Manufacturers - GeneralSector: Healthcare

Valuation Snapshot

Stable Growth$141.10 - $300.45$200.60
Multi-Stage$119.38 - $130.37$124.78
Blended Fair Value$162.69
Current Price$83.93
Upside93.84%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS6.60%4.10%3.112.952.782.622.472.262.052.052.032.03
YoY Growth--5.31%6.18%6.08%6.36%9.13%10.11%0.10%0.84%0.14%-2.48%
Dividend Yield--3.47%2.25%2.61%3.20%3.35%3.08%2.58%3.95%3.35%4.02%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)19,034.00
(-) Cash Dividends Paid (M)8,109.00
(=) Cash Retained (M)10,925.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)3,806.802,379.251,427.55
Cash Retained (M)10,925.0010,925.0010,925.00
(-) Cash Required (M)-3,806.80-2,379.25-1,427.55
(=) Excess Retained (M)7,118.208,545.759,497.45
(/) Shares Outstanding (M)2,520.752,520.752,520.75
(=) Excess Retained per Share2.823.393.77
LTM Dividend per Share3.223.223.22
(+) Excess Retained per Share2.823.393.77
(=) Adjusted Dividend6.046.616.98
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate4.60%5.60%6.60%
Fair Value$141.10$200.60$300.45
Upside / Downside68.12%139.00%257.97%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)19,034.0020,100.2421,226.2222,415.2623,670.9224,996.9125,746.82
Payout Ratio42.60%52.08%61.56%71.04%80.52%90.00%92.50%
Projected Dividends (M)8,109.0010,468.6413,067.2015,924.0419,059.9522,497.2223,815.81

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate4.60%5.60%6.60%
Year 1 PV (M)9,506.339,597.229,688.10
Year 2 PV (M)10,775.2710,982.2811,191.26
Year 3 PV (M)11,923.9912,269.2512,621.11
Year 4 PV (M)12,960.2313,462.9813,980.22
Year 5 PV (M)13,891.2814,568.1115,271.06
PV of Terminal Value (M)241,866.22253,650.69265,890.08
Equity Value (M)300,923.32314,530.52328,641.83
Shares Outstanding (M)2,520.752,520.752,520.75
Fair Value$119.38$124.78$130.37
Upside / Downside42.24%48.67%55.34%

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