Comprehensive Stock Comparison
Compare Merck & Co., Inc. (MRK) vs Johnson & Johnson (JNJ) Stock
Analyze side-by-side fundamentals, valuation, growth, and profitability to decide which stock is the better buy.
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Quick Verdict
| Category | Winner | Why |
|---|---|---|
| Growth | JNJ | 4.3% revenue growth vs MRK's 1.3% |
| Value | MRK | PEG 1.13 vs 38.22 |
| Quality / Margins | MRK | 28.1% net margin vs JNJ's 27.3% |
| Stability / Safety | JNJ | Beta 0.06 vs MRK's 0.43 |
| Dividends | JNJ | 2.0% yield; 36-year raise streak; MRK pays no meaningful dividend |
| Momentum (1Y) | JNJ | +53.7% vs MRK's +37.7% |
Who Each Stock Is For
Income & stability
Growth exposure
Long-term compounding (10Y)
Sleep-well-at-night portfolio
Valuation efficiency (growth/$)
Defensive / Recession hedge
Business Model
What each company does and how it makes money
Merck & Co. is a global pharmaceutical company that develops and markets prescription medicines, vaccines, and animal health products. It generates revenue primarily from its Pharmaceutical segment — including blockbuster cancer drug Keytruda — which accounts for roughly 90% of sales, with the remaining 10% coming from Animal Health products. The company's key competitive advantage lies in its deep oncology franchise, particularly Keytruda's dominant position in immuno-oncology, supported by extensive clinical data and patent protection.
Johnson & Johnson is a global healthcare company focused on innovative medicines and medical technology. It generates revenue primarily from its Innovative Medicine segment — prescription drugs for complex diseases like cancer and autoimmune disorders — and its MedTech segment — medical devices including orthopedics, surgery tools, and contact lenses. The company's competitive advantage lies in its massive R&D scale, deep scientific expertise, and diversified portfolio of patented pharmaceuticals and medical devices.
Revenue Breakdown by Segment
How each company's revenue is distributed across its business units
Financial Metrics Comparison
Side-by-side fundamentals across 2 stocks. BestLagging
Financial Scorecard
JNJ leads in 3 of 6 categories (Total Returns, Risk & Volatility). MRK leads in 2 (Valuation Metrics, Profitability & Efficiency). 1 tied.
Financial Metrics (TTM)
JNJ and MRK operate at a comparable scale, with $92.1B and $65.0B in trailing revenue. Profitability is closely matched — net margins range from 28.1% (MRK) to 27.3% (JNJ).
| Metric | MRKMerck & Co., Inc. | JNJJohnson & Johnson |
|---|---|---|
| RevenueTrailing 12 months | $65.0B | $92.1B |
| EBITDAEarnings before interest/tax | $31.1B | $31.4B |
| Net IncomeAfter-tax profit | $18.3B | $25.1B |
| Free Cash FlowCash after capex | $10.5B | $19.1B |
| Gross MarginGross profit ÷ Revenue | +81.5% | +68.1% |
| Operating MarginEBIT ÷ Revenue | +41.2% | +26.1% |
| Net MarginNet income ÷ Revenue | +28.1% | +27.3% |
| FCF MarginFCF ÷ Revenue | +16.2% | +20.7% |
| Rev. Growth (YoY)Latest quarter vs prior year | +5.0% | +6.8% |
| EPS Growth (YoY)Latest quarter vs prior year | -19.6% | +91.0% |
Valuation Metrics
At 17.0x trailing earnings, MRK trades at a 60% valuation discount to JNJ's 42.9x P/E. Adjusting for growth (PEG ratio), MRK offers better value at 0.80x vs JNJ's 38.22x — a lower PEG means you pay less per unit of expected earnings growth.
| Metric | MRKMerck & Co., Inc. | JNJJohnson & Johnson |
|---|---|---|
| Market CapShares × price | $307.2B | $598.7B |
| Enterprise ValueMkt cap + debt − cash | $307.2B | $611.2B |
| Trailing P/EPrice ÷ TTM EPS | 17.00x | 42.91x |
| Forward P/EPrice ÷ next-FY EPS est. | 24.05x | 21.48x |
| PEG RatioP/E ÷ EPS growth rate | 0.80x | 38.22x |
| EV / EBITDAEnterprise value multiple | 9.89x | 20.73x |
| Price / SalesMarket cap ÷ Revenue | 4.73x | 6.74x |
| Price / BookPrice ÷ Book value/share | 5.98x | 8.44x |
| Price / FCFMarket cap ÷ FCF | — | 30.17x |
Profitability & Efficiency
MRK delivers a 35.2% return on equity — every $100 of shareholder capital generates $35 in annual profit, vs $32 for JNJ. On the Piotroski fundamental quality scale (0–9), JNJ scores 5/9 vs MRK's 2/9, reflecting solid financial health.
| Metric | MRKMerck & Co., Inc. | JNJJohnson & Johnson |
|---|---|---|
| ROE (TTM)Return on equity | +35.2% | +31.7% |
| ROA (TTM)Return on assets | — | +13.0% |
| ROICReturn on invested capital | +32.6% | +20.7% |
| ROCEReturn on capital employed | — | +17.6% |
| Piotroski ScoreFundamental quality 0–9 | 2 | 5 |
| Debt / EquityFinancial leverage | — | 0.51x |
| Net DebtTotal debt minus cash | $0 | $12.5B |
| Cash & Equiv.Liquid assets | — | $24.1B |
| Total DebtShort + long-term debt | $0 | $36.6B |
| Interest CoverageEBIT ÷ Interest expense | 25.93x | 48.23x |
Total Returns (with DRIP)
A $10,000 investment in MRK five years ago would be worth $20,074 today (with dividends reinvested), compared to $17,079 for JNJ. Over the past 12 months, JNJ leads with a +53.7% total return vs MRK's +37.7%. The 3-year compound annual growth rate (CAGR) favors JNJ at 19.8% vs MRK's 7.8% — a key indicator of consistent wealth creation.
| Metric | MRKMerck & Co., Inc. | JNJJohnson & Johnson |
|---|---|---|
| YTD ReturnYear-to-date | +16.3% | +20.4% |
| 1-Year ReturnPast 12 months | +37.7% | +53.7% |
| 3-Year ReturnCumulative with dividends | +25.3% | +71.8% |
| 5-Year ReturnCumulative with dividends | +100.7% | +70.8% |
| 10-Year ReturnCumulative with dividends | +210.2% | +175.7% |
| CAGR (3Y)Annualised 3-year return | +7.8% | +19.8% |
Risk & Volatility
JNJ is the less volatile stock with a 0.06 beta — it tends to amplify market swings less than MRK's 0.43 beta. A beta below 1.0 means the stock typically moves less than the S&P 500.
| Metric | MRKMerck & Co., Inc. | JNJJohnson & Johnson |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 0.43x | 0.06x |
| 52-Week HighHighest price in past year | $125.14 | $248.93 |
| 52-Week LowLowest price in past year | $73.31 | $141.50 |
| % of 52W HighCurrent price vs 52-week peak | +98.9% | +99.8% |
| RSI (14)Momentum oscillator 0–100 | 56.0 | 66.2 |
| Avg Volume (50D)Average daily shares traded | 10.8M | 7.1M |
Analyst Outlook
Wall Street rates MRK as "Buy" and JNJ as "Buy". Consensus price targets imply 0.1% upside for MRK (target: $124) vs -7.7% for JNJ (target: $229). JNJ is the only dividend payer here at 1.96% yield — a key consideration for income-focused portfolios.
| Metric | MRKMerck & Co., Inc. | JNJJohnson & Johnson |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Buy |
| Price TargetConsensus 12-month target | $123.92 | $229.33 |
| # AnalystsCovering analysts | 36 | 39 |
| Dividend YieldAnnual dividend ÷ price | — | +2.0% |
| Dividend StreakConsecutive years of raises | 13 | 36 |
| Dividend / ShareAnnual DPS | — | $4.87 |
| Buyback YieldShare repurchases ÷ mkt cap | 0.0% | +0.4% |
Historical Charts
Charts are rendered on first load. Hover for details.
Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Mar 20 | Feb 26 | Change |
|---|---|---|---|
| Merck & Co., Inc. (MRK) | 100 | 146.11 | +46.1% |
| Johnson & Johnson (JNJ) | 100 | 164.8 | +64.8% |
Merck & Co., Inc. (MRK) returned +101% over 5 years vs Johnson & Johnson (JNJ)'s +71%. A $10,000 investment in MRK 5 years ago would be worth $20,074 today (including dividends reinvested).
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Merck & Co., Inc. (MRK) | $39.8B | $65.0B | +63.3% |
| Johnson & Johnson (JNJ) | $71.9B | $88.8B | +23.6% |
Merck & Co., Inc.'s revenue grew from $39.8B (2016) to $65.0B (2025) — a 5.6% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Merck & Co., Inc. (MRK) | 9.8% | 28.1% | +185.1% |
| Johnson & Johnson (JNJ) | 23.0% | 15.8% | -31.2% |
Merck & Co., Inc.'s net margin went from 10% (2016) to 28% (2025).
Chart 4P/E Ratio History — 9 Years
| Stock | 2017 | 2025 | Change |
|---|---|---|---|
| Merck & Co., Inc. (MRK) | 57.7 | 14.5 | -74.9% |
| Johnson & Johnson (JNJ) | 297.3 | 25 | -91.6% |
Merck & Co., Inc. has traded in a 15x–58x P/E range over 8 years; current trailing P/E is ~17x. Johnson & Johnson has traded in a 11x–297x P/E range over 8 years; current trailing P/E is ~43x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Merck & Co., Inc. (MRK) | 2.04 | 7.28 | +256.9% |
| Johnson & Johnson (JNJ) | 5.93 | 5.79 | -2.4% |
Merck & Co., Inc.'s EPS grew from $2.04 (2016) to $7.28 (2025) — a 15% CAGR.
Chart 6Free Cash Flow — 5 Years
Merck & Co., Inc. generated $0M FCF in 2025 (-100% vs 2021). Johnson & Johnson generated $20B FCF in 2024 (+0% vs 2021).
MRK vs JNJ: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is MRK or JNJ a better buy right now?
Merck & Co., Inc. (MRK) offers the better valuation at 17.0x trailing P/E (24.0x forward), making it the more compelling value choice. Analysts rate Merck & Co., Inc. (MRK) a "Buy" — based on 36 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which has the better valuation — MRK or JNJ?
On trailing P/E, Merck & Co., Inc. (MRK) is the cheapest at 17.0x versus Johnson & Johnson at 42.9x. On forward P/E, Johnson & Johnson is actually cheaper at 21.5x — notably different from the trailing picture, reflecting expected earnings growth. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Merck & Co., Inc. wins at 1.13x versus Johnson & Johnson's 38.22x — a reasonable growth-adjusted valuation.
03Which is the better long-term investment — MRK or JNJ?
Over the past 5 years, Merck & Co., Inc. (MRK) delivered a total return of +100.7%, compared to +70.8% for Johnson & Johnson (JNJ). A $10,000 investment in MRK five years ago would be worth approximately $20K today (assuming dividends reinvested). Over 10 years, the gap is even starker: MRK returned +210.2% versus JNJ's +175.7%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
04Which is safer — MRK or JNJ?
By beta (market sensitivity over 5 years), Johnson & Johnson (JNJ) is the lower-risk stock at 0.06β versus Merck & Co., Inc.'s 0.43β — meaning MRK is approximately 674% more volatile than JNJ relative to the S&P 500.
05Which has better profit margins — MRK or JNJ?
Merck & Co., Inc. (MRK) is the more profitable company, earning 28.1% net margin versus 15.8% for Johnson & Johnson — meaning it keeps 28.1% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: MRK leads at 41.2% versus 24.9% for JNJ. At the gross margin level — before operating expenses — MRK leads at 81.5%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
06Is MRK or JNJ more undervalued right now?
The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential. By this metric, Merck & Co., Inc. (MRK) is the more undervalued stock at a PEG of 1.13x versus Johnson & Johnson's 38.22x. A PEG below 1.5 suggests fair-to-attractive pricing relative to expected growth. On forward earnings alone, Johnson & Johnson (JNJ) trades at 21.5x forward P/E versus 24.0x for Merck & Co., Inc. — 2.6x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for MRK: 0.1% to $123.92.
07Which pays a better dividend — MRK or JNJ?
In this comparison, JNJ (2.0% yield) pays a dividend. MRK does not pay a meaningful dividend and should not be held primarily for income.
08Is MRK or JNJ better for a retirement portfolio?
For long-horizon retirement investors, Johnson & Johnson (JNJ) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.06), 2.0% yield, +175.7% 10Y return). Both have compounded well over 10 years (JNJ: +175.7%, MRK: +210.2%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
09What are the main differences between MRK and JNJ?
Both stocks operate in the Healthcare sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. In terms of investment character: MRK is a large-cap deep-value stock; JNJ is a large-cap quality compounder stock. JNJ pays a dividend while MRK does not, making them suitable for different income and tax situations. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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