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

Company Dividend Discount ModelIndustry: Drug Manufacturers - GeneralSector: Healthcare

Valuation Snapshot

Stable Growth$140.53 - $298.28$199.56
Multi-Stage$119.00 - $129.96$124.38
Blended Fair Value$161.97
Current Price$83.93
Upside92.99%
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 Rate9.10%9.10%9.10%
Growth Rate4.60%5.60%6.60%
Fair Value$140.53$199.56$298.28
Upside / Downside67.44%137.77%255.39%

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 Rate9.10%9.10%9.10%
Growth Rate4.60%5.60%6.60%
Year 1 PV (M)9,504.779,595.639,686.50
Year 2 PV (M)10,771.7110,978.6511,187.56
Year 3 PV (M)11,918.0912,263.1812,614.87
Year 4 PV (M)12,951.6813,454.1013,971.00
Year 5 PV (M)13,879.8314,556.0915,258.47
PV of Terminal Value (M)240,953.41252,693.40264,886.60
Equity Value (M)299,979.48313,541.06327,605.00
Shares Outstanding (M)2,520.752,520.752,520.75
Fair Value$119.00$124.38$129.96
Upside / Downside41.79%48.20%54.85%

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