Merck & Co. Inc. (MRK) | Valuation Ratios

Current Valuation Ratios

Merck & Co. Inc., current price multiples

	Merck & Co. Inc.	Health Care
Selected Financial Data
Current share price (P)	$ 47.80
No. shares of common stock outstanding	3,022,367,538
Growth rate (g)	8.67%

Earnings per share (EPS)	$ 2.04
Next year expected EPS	$ 2.22
Operating profit per share	$ 3.05
Sales per share	$ 15.64
Book value per share (BVPS)	$ 17.54
Ratios (Price Multiples)
Price to earnings (P/E)	23.42	17.66
Price to next year expected earnings	21.55	16.21
Price-earnings-growth (PEG)	2.70	1.98
Price to operating profit (P/OP)	15.68	13.27
Price to sales (P/S)	3.06	2.69
Price to book value (P/BV)	2.72	3.16

If company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.

Otherwise, if company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.

Merck & Co. Inc., historical price multiples

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Price to earnings (P/E)	20.94	18.63	116.63	9.00	6.53
Price to operating profit (P/OP)	14.02	15.23	42.37	48.64	10.10
Price to sales (P/S)	2.73	2.43	2.18	4.23	2.14
Price to book value (P/BV)	2.44	2.14	1.85	1.97	2.72

Ratio	Description	The company
P/E ratio	The P/E ratio tells analyst how much an investor in common stock pays per dollar of current earnings.	Merck & Co. Inc.'s P/E ratio declined from 2010 to 2011 but then slightly increased from 2011 to 2012.
P/OP ratio	Because P/E ratio is calculated using net income, the ratio can be sensitive to nonrecurring earnings and capital structure, analysts may use price to operating profit.	Merck & Co. Inc.'s P/OP ratio declined from 2010 to 2011 and from 2011 to 2012.
P/S ratio	An rationale for the P/S ratio is that sales, as the top line in an income statement, are generally less subject to distortion or manipulation than other fundamentals such as EPS or book value. Sales are also more stable than earnings and never negative.	Merck & Co. Inc.'s P/S ratio increased from 2010 to 2011 and from 2011 to 2012.
P/BV ratio	The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company's required rate of return and its actual rate of return.	Merck & Co. Inc.'s P/BV ratio increased from 2010 to 2011 and from 2011 to 2012.

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
No. shares of common stock outstanding¹	3,022,367,538	3,044,008,396	3,083,080,697	3,115,317,260	2,107,712,364
Selected Financial Data (USD $)
Net income attributable to Merck & Co., Inc. (in millions)	6,168	6,272	861	12,899	7,808
Earnings per share (EPS)	2.04	2.06	0.28	4.14	3.70
Share price^1, 2	42.73	38.38	32.57	37.27	24.20
P/E Ratio, Comparison to Industry
Merck & Co. Inc.	20.94	18.63	116.63	9.00	6.53
Industry, Health Care	16.18	14.47	15.47	11.70	12.38

¹ Data adjusted for splits and stock dividends.
² Close price on the filing date of Merck & Co. Inc.'s Annual Report.

Ratio	Description	The company
P/E ratio	The P/E ratio tells analyst how much an investor in common stock pays per dollar of current earnings.	Merck & Co. Inc.'s P/E ratio declined from 2010 to 2011 but then slightly increased from 2011 to 2012.

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
No. shares of common stock outstanding¹	3,022,367,538	3,044,008,396	3,083,080,697	3,115,317,260	2,107,712,364
Selected Financial Data (USD $)
Operating income (in millions)	9,213	7,670	2,370	2,387	5,052
Operating profit per share	3.05	2.52	0.77	0.77	2.40
Share price^1, 2	42.73	38.38	32.57	37.27	24.20
P/OP Ratio, Comparison to Industry
Merck & Co. Inc.	14.02	15.23	42.37	48.64	10.10
Industry, Health Care	12.16	10.55	10.93	10.84	10.06

¹ Data adjusted for splits and stock dividends.
² Close price on the filing date of Merck & Co. Inc.'s Annual Report.

Ratio	Description	The company
P/OP ratio	Because P/E ratio is calculated using net income, the ratio can be sensitive to nonrecurring earnings and capital structure, analysts may use price to operating profit.	Merck & Co. Inc.'s P/OP ratio declined from 2010 to 2011 and from 2011 to 2012.

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
No. shares of common stock outstanding¹	3,022,367,538	3,044,008,396	3,083,080,697	3,115,317,260	2,107,712,364
Selected Financial Data (USD $)
Sales (in millions)	47,267	48,047	45,987	27,428	23,850
Sales per share	15.64	15.78	14.92	8.80	11.32
Share price^1, 2	42.73	38.38	32.57	37.27	24.20
P/S Ratio, Comparison to Industry
Merck & Co. Inc.	2.73	2.43	2.18	4.23	2.14
Industry, Health Care	2.47	2.15	2.08	2.28	1.91

¹ Data adjusted for splits and stock dividends.
² Close price on the filing date of Merck & Co. Inc.'s Annual Report.

Ratio	Description	The company
P/S ratio	An rationale for the P/S ratio is that sales, as the top line in an income statement, are generally less subject to distortion or manipulation than other fundamentals such as EPS or book value. Sales are also more stable than earnings and never negative.	Merck & Co. Inc.'s P/S ratio increased from 2010 to 2011 and from 2011 to 2012.

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
No. shares of common stock outstanding¹	3,022,367,538	3,044,008,396	3,083,080,697	3,115,317,260	2,107,712,364
Selected Financial Data (USD $)
Total Merck & Co., Inc. stockholders' equity (in millions)	53,020	54,517	54,376	59,058	18,758
Book value per share (BVPS)	17.54	17.91	17.64	18.96	8.90
Share price^1, 2	42.73	38.38	32.57	37.27	24.20
P/BV Ratio, Comparison to Industry
Merck & Co. Inc.	2.44	2.14	1.85	1.97	2.72
Industry, Health Care	2.90	2.62	2.44	2.47	2.63

¹ Data adjusted for splits and stock dividends.
² Close price on the filing date of Merck & Co. Inc.'s Annual Report.

Ratio	Description	The company
P/BV ratio	The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company's required rate of return and its actual rate of return.	Merck & Co. Inc.'s P/BV ratio increased from 2010 to 2011 and from 2011 to 2012.