Merck KGaAXSWX:MER +1.92%82 Return-on-Tangible-Equity is 77.89% as of Mar. 2026, which is 5% below its 10-year median of 82.42. GuruFocus rates XSWX:MER with a GF Score™ of 82/100 and a GF Value™ of CHF125.76. The stock has 9 warning signs investors should review. Among 897 Drug Manufacturers companies, Merck KGaA ranks better than 91.75% on this metric.
Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. Merck KGaA's annualized net income for the quarter that ended in Mar. 2026 was CHF2,399 Mil. Merck KGaA's average shareholder tangible equity for the quarter that ended in Mar. 2026 was CHF3,080 Mil. Therefore, Merck KGaA's annualized Return-on-Tangible-Equity for the quarter that ended in Mar. 2026 was 77.89%.
The historical rank and industry rank for Merck KGaA's Return-on-Tangible-Equity or its related term are showing as below:
XSWX:MER'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: 61.47 Med: 82.42 Max: 227.1
Current: 61.47
During the past 13 years, Merck KGaA's highest Return-on-Tangible-Equity was 227.10%. The lowest was 61.47%. And the median was 82.42%.
XSWX:MER's Return-on-Tangible-Equity is ranked better than 91.75% of 897
companies
in the Drug Manufacturers industry
Industry Median: 7.89
vs XSWX:MER: 61.47
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.
Merck KGaA Return-on-Tangible-Equity Related Terms
Merck KGaA Return-on-Tangible-Equity Historical Data
* Premium members only.
The historical data trend for Merck KGaA's Return-on-Tangible-Equity can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
XSWX:MER vs ZTS, UTHR, VTRS: Return-on-Tangible-Equity Comparison
For the Drug Manufacturers - Specialty & Generic subindustry, Merck KGaA's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Merck KGaA Return-on-Tangible-Equity vs Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Merck KGaA's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where Merck KGaA's Return-on-Tangible-Equity falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of annual Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Mar. 2026) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
What does a Return-on-Tangible-Equity of 77.89% mean?
Merck KGaA (XSWX:MER) has a Return-on-Tangible-Equity of 77.89% as of Mar. 2026. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Merck KGaA and its competitors. This is near median its historical median of 82.42. Over the past decade, Merck KGaA's Return-on-Tangible-Equity has ranged from 61.47 to 227.10. According to the industry distribution chart, Merck KGaA ranks #74 out of 897 companies in the Drug Manufacturers industry, placing it in the top 8.2%.
Is Merck KGaA's Return-on-Tangible-Equity too high?
Merck KGaA's current Return-on-Tangible-Equity of 77.89% is near median its 10-year median of 82.42. Over the past 10 years, this metric has ranged from a low of 61.47 to a high of 227.10. The Drug Manufacturers industry median Return-on-Tangible-Equity is 7.89. Merck KGaA's value of 77.89% is 887.2% above this industry median. Based on the distribution chart, Merck KGaA ranks #74 out of 897 companies in the Drug Manufacturers industry, which is in the top quartile — a strong position relative to peers. Overall, Merck KGaA has a GF Score™ of 82/100, reflecting its overall financial health beyond just this single metric.
How does Merck KGaA's Return-on-Tangible-Equity compare to ZTS and UTHR?
According to the Drug Manufacturers industry distribution chart, Merck KGaA ranks #74 out of 897 companies for Return-on-Tangible-Equity. This places Merck KGaA in the top 8% of its industry — outperforming the majority of peers. The industry median Return-on-Tangible-Equity is 7.89. Merck KGaA's value of 77.89% is 887.2% above this benchmark. Historically, Merck KGaA's own Return-on-Tangible-Equity has ranged from 61.47 to 227.10 over the past decade. While the company's 10-year median is 82.42 vs. the industry median of 7.89, Merck KGaA has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Return-on-Tangible-Equity for a Drug Manufacturers company?
The median Return-on-Tangible-Equity among Drug Manufacturers companies is 7.89, based on 897 companies in the industry. Companies in the top quartile (top 25%) have a Return-on-Tangible-Equity significantly above this median, while those in the bottom quartile fall well below. However, Return-on-Tangible-Equity should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Merck KGaA's current Return-on-Tangible-Equity of 77.89% is 887.2% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Return-on-Tangible-Equity mean?
A high Return-on-Tangible-Equity can signal that a stock is expensive relative to its fundamentals. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Merck KGaA and its competitors. For the Drug Manufacturers industry, the median Return-on-Tangible-Equity is 7.89 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Merck KGaA's current Return-on-Tangible-Equity is 77.89%, which is near median its own 10-year median of 82.42. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Merck KGaA stock overvalued right now?
Merck KGaA (XSWX:MER) has a current Return-on-Tangible-Equity of 77.89%. The stock's GF Value™ is CHF125.76, compared to a current price of CHF132.80 — trading 5.6% above its estimated fair value. The current Return-on-Tangible-Equity is 77.89%, which is near median its 10-year median of 82.42 and 887.2% above the Drug Manufacturers industry median of 7.89. Merck KGaA's overall GF Score™ is 82/100 with 9 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Return-on-Tangible-Equity calculated?
Return-on-Tangible-Equity is calculated from a company's financial statements. For Merck KGaA (XSWX:MER), the current Return-on-Tangible-Equity is 77.89% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Merck KGaA (XSWX:MER) Overvalued in 2026?
Based on GuruFocus' analysis, Merck KGaA stock appears to be overvalued.
The current stock price of CHF132.80 is trading 5.6% above its estimated GF Value™ of CHF125.76.
Key valuation signals for XSWX:MER:
Return-on-Tangible-Equity: 77.89% (near median its 10-year median of 82.42)
GF Value™: CHF125.76 vs. price of CHF132.80 (5.6% above fair value)
Industry Position: 887.2% above the Drug Manufacturers median (#74 of 897)
No single metric tells the full story. See the XSWX:MER stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Merck KGaA operates in three main segments: Life Science, Electronics, and Healthcare. The Life Science segment provides laboratory consumables and instruments to researchers in academia and applied fields, including the biopharmaceutical industry. The Electronics segment offers specialty materials to manufacture a variety of products, such as semiconductors and flat-screen televisions. In the healthcare segment, Merck develops, manufactures, and sells branded pharmaceuticals with significant therapeutic concentrations in oncology, multiple sclerosis, and fertility. In 1995, the E. Merck KG family publicly sold part of the company, resulting in the current 30% public ownership of the firm.
82GF Score
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