Merck KGaAXSWX:MER 81 ROC (Joel Greenblatt) % is 31.35% as of Mar. 2026, which is 18% below its 10-year median of 38.30. GuruFocus rates XSWX:MER with a GF Score™ of 81/100 and a GF Value™ of CHF125.76. The stock has 9 warning signs investors should review. Among 977 Drug Manufacturers companies, Merck KGaA ranks better than 72.98% on this metric.
Joel Greenblatt defined Return on Capital differently in his book The Little Book That Still Beats the Market (Little Books. Big Profits). He defines ROC (Joel Greenblatt) % as EBIT divided by the total of Property, Plant and Equipment and net working capital. Merck KGaA's annualized ROC (Joel Greenblatt) % for the quarter that ended in Mar. 2026 was 31.35%.
The historical rank and industry rank for Merck KGaA's ROC (Joel Greenblatt) % or its related term are showing as below:
XSWX:MER'
s ROC (Joel Greenblatt) % Range Over the Past 10 Years
Min: 28.7 Med: 38.3 Max: 52.82
Current: 28.7
During the past 13 years, Merck KGaA's highest ROC (Joel Greenblatt) % was 52.82%. The lowest was 28.70%. And the median was 38.30%.
XSWX:MER's ROC (Joel Greenblatt) % is ranked better than 72.98% of 977
companies
in the Drug Manufacturers industry
Industry Median: 11.37
vs XSWX:MER: 28.70
Merck KGaA's 5-Year average Growth Rate of ROC (Joel Greenblatt) % was -9.50% per year.
The way Joel Greenblatt defines Return on Capital is a more accurate measure of how efficiently the company generates returns onthe capital actually invested in the business. EBIT is used instead of net income because the tax and interest payment may be affected by factors other than the core business operation. Intangible assets are not included in the calculation because they don't need to be replaced.
Merck KGaA ROC (Joel Greenblatt) % Historical Data
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The historical data trend for Merck KGaA's ROC (Joel Greenblatt) % 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: ROC (Joel Greenblatt) % Comparison
For the Drug Manufacturers - Specialty & Generic subindustry, Merck KGaA's ROC (Joel Greenblatt) %, along with its competitors' market caps and ROC (Joel Greenblatt) % 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 ROC (Joel Greenblatt) % vs Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Merck KGaA's ROC (Joel Greenblatt) % distribution charts can be found below:
* The bar in red indicates where Merck KGaA's ROC (Joel Greenblatt) % falls into.
Joel Greenblatt defined Return on Capital differently in his book The Little Book That Still Beats the Market (Little Books. Big Profits) . He defines Return on Capital as follows:
EBIT stands for Earnings Before Interest and Taxes.
Fixed Assets are also known as non-current assets. They include the Property, Plant and Equipment that the firm needs in its operation.
GuruFocus calculates net working capital as: (Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Deferred Revenue + Other Current Liabilities). We're trying to account for OPERATING assets and liabilities (part of daily business) when calculating working capital. Cash and marketable securities are considered NON-OPERATING assets and are not included in calculation. We will also back out all interest bearing debt, short term debt and the portion of long term debt that is due in the current period from the current liabilities. This debt will be considered when computing cost of capital and it would be inappropriate to count it twice.
Note:
The EBIT data used here is four times the quarterly (Mar. 2026) EBIT data.
* 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.
What does a ROC (Joel Greenblatt) % of 31.35% mean?
Merck KGaA (XSWX:MER) has a ROC (Joel Greenblatt) % of 31.35% as of Mar. 2026. Joel Greenblatt's return on capital is the ratio of EBIT to average fixed assets and net working capital. View historical data on Merck KGaA and its competitors. This is 18% below median its historical median of 38.30. Over the past decade, Merck KGaA's ROC (Joel Greenblatt) % has ranged from 28.70 to 52.82. According to the industry distribution chart, Merck KGaA ranks #264 out of 977 companies in the Drug Manufacturers industry, placing it in the top 27%.
Is Merck KGaA's ROC (Joel Greenblatt) % too high?
Merck KGaA's current ROC (Joel Greenblatt) % of 31.35% is 18% below median its 10-year median of 38.30. Over the past 10 years, this metric has ranged from a low of 28.70 to a high of 52.82. The Drug Manufacturers industry median ROC (Joel Greenblatt) % is 11.37. Merck KGaA's value of 31.35% is 175.7% above this industry median. Based on the distribution chart, Merck KGaA ranks #264 out of 977 companies in the Drug Manufacturers industry, which is above the industry midpoint. Overall, Merck KGaA has a GF Score™ of 81/100, reflecting its overall financial health beyond just this single metric.
How does Merck KGaA's ROC (Joel Greenblatt) % compare to ZTS and UTHR?
According to the Drug Manufacturers industry distribution chart, Merck KGaA ranks #264 out of 977 companies for ROC (Joel Greenblatt) %. This puts Merck KGaA in the upper half of its industry. The industry median ROC (Joel Greenblatt) % is 11.37. Merck KGaA's value of 31.35% is 175.7% above this benchmark. Historically, Merck KGaA's own ROC (Joel Greenblatt) % has ranged from 28.70 to 52.82 over the past decade. While the company's 10-year median is 38.30 vs. the industry median of 11.37, 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 ROC (Joel Greenblatt) % for a Drug Manufacturers company?
The median ROC (Joel Greenblatt) % among Drug Manufacturers companies is 11.37, based on 977 companies in the industry. Companies in the top quartile (top 25%) have a ROC (Joel Greenblatt) % significantly above this median, while those in the bottom quartile fall well below. However, ROC (Joel Greenblatt) % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Merck KGaA's current ROC (Joel Greenblatt) % of 31.35% is 175.7% 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 ROC (Joel Greenblatt) % mean?
A high ROC (Joel Greenblatt) % can signal that a stock is expensive relative to its fundamentals. Joel Greenblatt's return on capital is the ratio of EBIT to average fixed assets and net working capital. View historical data on Merck KGaA and its competitors. For the Drug Manufacturers industry, the median ROC (Joel Greenblatt) % is 11.37 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Merck KGaA's current ROC (Joel Greenblatt) % is 31.35%, which is 18% below median its own 10-year median of 38.30. 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 ROC (Joel Greenblatt) % of 31.35%. 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 ROC (Joel Greenblatt) % is 31.35%, which is 18% below median its 10-year median of 38.30 and 175.7% above the Drug Manufacturers industry median of 11.37. Merck KGaA's overall GF Score™ is 81/100 with 9 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC (Joel Greenblatt) % calculated?
ROC (Joel Greenblatt) % is calculated from a company's financial statements. For Merck KGaA (XSWX:MER), the current ROC (Joel Greenblatt) % is 31.35% 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:
ROC (Joel Greenblatt) %: 31.35% (18% below median its 10-year median of 38.30)
GF Value™: CHF125.76 vs. price of CHF132.80 (5.6% above fair value)
Industry Position: 175.7% above the Drug Manufacturers median (#264 of 977)
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.
81GF Score
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