JNJ vs MRK: Which Is the Better Buy?
Side-by-side comparison of Johnson & Johnson and Merck & Co., Inc. — fair value, conviction, valuation metrics, and QuantHub research signals.
Updated 2026-04-11.
Johnson & Johnson · Healthcare
$238.46
-11.8% upside to fair value
Med Conviction
Grade C+
VS
Merck & Co., Inc. · Healthcare
$121.42
-2.9% upside to fair value
Med Conviction
Grade B
QuantHub Verdict
MRK has more upside to fair value
(-2.9%).
MRK trades at a lower forward P/E
(14.0x).
These are model outputs — not personalized investment advice.
See all research →
Valuation & Fundamentals
| Metric |
JNJ |
MRK |
| Current Price |
$238.46 |
$121.42 |
| Fair Value Estimate |
$210.28 |
$118.00 |
| Upside to Fair Value |
-11.8%
|
-2.9%
|
| Market Cap |
$574.7B |
$300.2B |
| Forward P/E |
20.2x
|
14.0x
|
| EV / EBITDA |
13.3x
|
11.8x
|
| Price / Sales |
6.2x
|
4.1x
|
| Price / FCF |
29.4x
|
21.4x
|
| Revenue Growth YoY |
+6.1%
|
+1.3%
|
| Gross Margin |
72.8%
|
81.5%
|
| Operating Margin |
27.2%
|
41.2%
|
| Return on Equity |
32.87%
|
34.7%
|
| Dividend Yield |
2.18% |
3.1% |
| FCF Yield |
3.4%
|
4.7%
|
| Analyst Consensus |
Moderate Buy
|
Buy
|
Investment Thesis
Johnson & Johnson is a high-quality healthcare conglomerate focused exclusively on Innovative Medicine and MedTech following the Kenvue spin-off. The company delivered $94.2B in FY2025 revenue with 6% operational growth, generated $19.7B in free cash flow, and guided for $99.5-100.5B in 2026 operational sales (above consensus). However, at $238 the stock trades at a P/S of 6.15x, well above the 5…
Merck is a top-5 global pharmaceutical company generating $65B in annual revenue with 81.5% gross margins and 28% net margins. Keytruda, the world's best-selling drug at $31.7B (49% of pharma revenue), faces patent expiry in 2028. Merck is aggressively building replacements through M&A and pipeline launches: Winrevair ($1.4B year one), Capvaxive ($759M), and the $6.7B Terns acquisition for TERN-7…
Accumulation Zones
| Metric |
JNJ |
MRK |
| Zone Low |
$157.71 |
$88.00 |
| Zone High |
$178.74 |
$100.00 |
| In Buy Zone? |
No
|
No
|