Price to FCFE (P/FCFE)
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Merck & Co. Inc. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Analysis of Geographic Areas
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Assets (ROA) since 2005
- Analysis of Revenues
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Free Cash Flow to Equity (FCFE)
Merck & Co. Inc., FCFE calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The financial information indicates a generally positive trend in free cash flow to equity (FCFE) over the observed period. Net cash provided by operating activities demonstrates volatility, while FCFE exhibits a more consistent upward trajectory, particularly in later years.
- Net Cash from Operations
- Net cash provided by operating activities increased significantly from 2021 to 2022, rising from US$13,122 million to US$19,095 million. This was followed by a decrease in 2023 to US$13,006 million, before rebounding strongly in 2024 to US$21,468 million. A subsequent decline to US$16,472 million is observed in 2025. This suggests operational cash flow is subject to fluctuation.
- Free Cash Flow to Equity (FCFE)
- FCFE shows a steady increase from US$10,305 million in 2021 to US$12,456 million in 2022. Growth continues in 2023, reaching US$13,327 million. A substantial increase is then noted in 2024, with FCFE reaching US$20,405 million. This positive trend is maintained in 2025, with FCFE further increasing to US$23,737 million. The consistent growth in FCFE suggests improving cash generation available to equity holders.
The divergence between operating cash flow and FCFE suggests that factors beyond core operations, such as financing activities or changes in non-operating assets and liabilities, are influencing the cash available to equity holders. The increasing FCFE, despite fluctuations in operating cash flow, indicates effective capital allocation or management of non-operational cash flows.
- Overall Trend
- The period demonstrates a clear upward trend in FCFE, culminating in a significant increase by 2025. While operating cash flow experiences variability, the consistent growth in FCFE suggests a strengthening financial position from the perspective of equity investors.
Price to FCFE Ratio, Current
Merck & Co. Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | |
| FCFE per share | |
| Current share price (P) | |
| Valuation Ratio | |
| P/FCFE | |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| AbbVie Inc. | |
| Amgen Inc. | |
| Bristol-Myers Squibb Co. | |
| Danaher Corp. | |
| Eli Lilly & Co. | |
| Gilead Sciences Inc. | |
| Johnson & Johnson | |
| Pfizer Inc. | |
| Regeneron Pharmaceuticals Inc. | |
| Thermo Fisher Scientific Inc. | |
| Vertex Pharmaceuticals Inc. | |
| P/FCFE, Sector | |
| Pharmaceuticals, Biotechnology & Life Sciences | |
| P/FCFE, Industry | |
| Health Care | |
Based on: 10-K (reporting date: 2025-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Merck & Co. Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | ||||||
| FCFE per share3 | ||||||
| Share price1, 4 | ||||||
| Valuation Ratio | ||||||
| P/FCFE5 | ||||||
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| P/FCFE, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| P/FCFE, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Data adjusted for splits and stock dividends.
3 2025 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= ÷ =
4 Closing price as at the filing date of Merck & Co. Inc. Annual Report.
5 2025 Calculation
P/FCFE = Share price ÷ FCFE per share
= ÷ =
6 Click competitor name to see calculations.
The Price to Free Cash Flow to Equity (P/FCFE) ratio exhibits fluctuations over the five-year period. Share price and FCFE per share both generally increased, but not consistently, impacting the overall P/FCFE trend.
- Share Price
- The share price increased from US$76.32 in 2021 to US$109.89 in 2022, and further to US$128.84 in 2023. A notable decrease occurred in 2024, falling to US$91.43, before recovering to US$123.93 in 2025. This indicates price volatility during the observed period.
- FCFE per Share
- FCFE per share demonstrated a consistent upward trend from US$4.08 in 2021 to US$5.26 in 2023. This growth accelerated in 2024, reaching US$8.08, and continued into 2025 with a value of US$9.60. The increasing FCFE per share suggests improving cash flow generation for equity holders.
- P/FCFE Ratio
- The P/FCFE ratio increased from 18.72 in 2021 to 24.48 in 2023, reflecting a higher valuation relative to FCFE. A significant decline was observed in 2024, with the ratio falling to 11.32, likely due to the decrease in share price coupled with the increase in FCFE per share. The ratio partially recovered in 2025 to 12.91, indicating a moderate re-valuation. The fluctuations suggest changing investor sentiment and valuation dynamics.
The interplay between share price and FCFE per share significantly influences the P/FCFE ratio. While FCFE per share consistently increased, the share price volatility resulted in a fluctuating P/FCFE ratio. The substantial drop in the ratio in 2024 warrants further investigation to understand the underlying causes of the share price decline.