Are You a Value Investor? This 1 Stock Could Be the Perfect Pick
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors.
Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.
Why Investors Should Pay Attention to This Value Stock
Different than growth or momentum investors, value-focused investors are all about finding good stocks at good prices, and discovering which companies are trading under what their true value is before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to help pick out the most attractive and discounted stocks.
Merck (MRK)
Based in Kenilworth, NJ, Merck & Co. boasts more than six blockbuster products in its portfolio with PD-L1 inhibitor, Keytruda, approved for several types of cancer and alone accounting for around 42% of its pharmaceutical sales. Keytruda has played an instrumental role in driving Merck’s steady revenue growth in the past few years. Though Keytruda may be Merck’s biggest strength and a solid reason to own the stock, it can also be argued that Merck is excessively dependent on the drug and should look for ways to diversify its product lineup.
MRK is a Zacks Rank #3 (Hold) stock, with a Value Style Score of B and VGM Score of B. Shares are currently trading at a forward P/E of 15.3X for the current fiscal year compared to the Large Cap Pharmaceuticals industry's P/E of 14.8X. Additionally, MRK has a PEG Ratio of 0.5 and a Price/Cash Flow ratio of 43.3X. Value investors should also note MRK's Price/Sales ratio of 5.6X.
Many value investors pay close attention to a company's earnings as well. For MRK, eight analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.19 to $8.59 per share for 2024. Per share MRK boasts an average earnings surprise of 38.2%.
Investors should take the time to consider MRK for their portfolios due to its solid Zacks Ranks, notable earnings and valuation metrics, and impressive Value and VGM Style Scores.
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Merck & Co., Inc. (MRK) : Free Stock Analysis Report
