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Deere & Company (DE) vs Merck & Co., Inc. (MRK): Which Is the Better Buy in 2026?

As of 2026-11-01, DE is undervalued at $675, with a DCF intrinsic value of $914 and a margin of safety of 26%. MRK is undervalued at $150, with an intrinsic value of $596 and a margin of safety of 75%. Of the two, MRK has the wider margin of safety.

DE
Deere & Company
$675.48
VS
MRK
Merck & Co., Inc.
$149.52

Rewards

DE
  • ★Free cash flow has grown at a 52.5% CAGR over the past 4 years, demonstrating strong earnings power growth.
MRK
  • ★Gross margin of 76.9% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
  • ★Each dollar of retained earnings has created $4.94 of earning power — management is an exceptional capital allocator.
  • ★Management has timed buybacks well — 2 out of 3 years showed value-accretive repurchases.

Risks

DE
  • ⚠FCF yield of 2.5% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
  • ⚠Trailing P/E of 37.5x is 110% above the historical average of 17.8x — the stock trades at a premium to its own history.
  • ⚠High leverage (2.06x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
MRK
  • ⚠PEG ratio of 2.82 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.
  • ⚠7 insider sales totaling $30.0M with no purchases in the past 3 months — insiders are reducing their exposure.
  • ⚠Free cash flow has declined at a 5.6% CAGR over the past 4 years — a concerning trend.

Key Valuation Metrics

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DE
MRK
Valuation
$4.52B
Free Cash Flow
N/A
2.48%
FCF Yield
N/A
37.55
Trailing P/E
151.03
29.65
Forward P/E
16.44
Quality & Moat
5.47%
ROIC
22.88%
18.24%
ROE
43.48%
25.18%
Gross Margin
76.91%
1.57
PEG Ratio
2.82
Balance Sheet Safety
2.06
Net Debt / Equity
1.11
N/A
Interest Coverage
N/A
6.70
Net Debt / EBITDA
2.93
0.96%
Dividend Yield
2.27%
DE: 2Ties: 1MRK: 7
DEMRK

Historical Fundamentals

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DE

Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.

MRK

Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.

Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.

$1 Retained Earnings Test

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DE
$-0.13
created per $1 retained over 3 years
Market Cap Declined
Σ Retained
$17.54B
Δ Market Cap
$-2.23B
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
MRK
$-1.72
created per $1 retained over 3 years
Market Cap Declined
Σ Retained
$12.28B
Δ Market Cap
$-21.09B
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer

Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer

Discounted Cash Flow (DCF) Analysis

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DE
26.1% Margin of Safety
Price is 26.1% below estimated fair value
Current Price: $675.48
Fair Value: $913.89
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued
MRK
74.9% Margin of Safety
Price is 74.9% below estimated fair value
Current Price: $149.52
Fair Value: $596.15
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued

Reverse DCF — Market-Implied Growth

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DE

What growth rate is the market pricing in at $675?

+19.6%
Market-Implied Owner Earnings Growth
Standard FCF implies +21.0%

The market implies +19.6% Owner Earnings growth, above historical trends.

Standard FCF implies a demanding +21.0%, reflecting heavy growth investment.

MRK

Requires positive FCF to compute implied growth rate.

Economic Moat Score

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DE
50/100
Narrow Moat
70+ Wide · 40-69 Narrow · <40 None

Narrow moat with margin stability as the key competitive advantage. Improving revenue predictability would strengthen the moat.

Composite score measuring competitive advantage durability across four dimensions: returns above cost of capital, pricing power stability, revenue predictability, and capital efficiency. Based on 4 years of fundamental data.
MRK
68/100
Narrow Moat
70+ Wide · 40-69 Narrow · <40 None

Narrow moat with revenue predictability as the key competitive advantage. Improving margin stability would strengthen the moat.

Composite score measuring competitive advantage durability across four dimensions: returns above cost of capital, pricing power stability, revenue predictability, and capital efficiency. Based on 4 years of fundamental data.

Forensic Accounting

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DE
-2.52
Unlikely Manipulator
Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

M-Score Trend

Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
MRK
-2.31
Unlikely Manipulator
Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

M-Score Trend

Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.

Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.

Ownership Breakdown

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DE
Insiders 0.2%Institutions 84.3%Retail & Other 15.5%
No. of Institutional Holders3,398
High insider ownership aligns management incentives with shareholders — a key signal in Buffett-style analysis. Institutional concentration can indicate smart-money conviction but also crowding risk.
MRK
Insiders 0.1%Institutions 82.9%Retail & Other 17.1%
No. of Institutional Holders4,903
High insider ownership aligns management incentives with shareholders — a key signal in Buffett-style analysis. Institutional concentration can indicate smart-money conviction but also crowding risk.

High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.

Insider Buying Activity

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DE
0
Buys (3M)
0
Buys (12M)
No open market insider purchases found.
Open market purchases · includes direct & indirect ownership · excludes option exercises
MRK
0
Buys (3M)
0
Buys (12M)
THULIN INGE G
Director
$250,000
@ $88.28 · 2025-02-06
BAKER DOUGLAS M JR
Director
$1.33M
@ $88.50 · 2025-02-05
Open market purchases · includes direct & indirect ownership · excludes option exercises

Open market purchases · includes direct & indirect ownership · excludes option exercises.

Insider Selling Activity

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DE
3
Sells (3M)
6
Sells (12M)
Total value (12M): $55.91M
CAMPBELL RYAN DAVID
Officer
$3.16M
@ $651.19 · 2026-08-31
CAMPBELL RYAN DAVID
Officer
$5.12M
@ $653.77 · 2026-08-24
CAMPBELL RYAN DAVID
Officer
$15.15M
@ $651.18 · 2026-08-21
REED CORY J.
Officer
$6.12M
@ $510.00 · 2026-01-14
MAY JOHN C. II
Chief Executive Officer
$20.80M
@ $501.49 · 2026-01-08
MAY JOHN C. II
Chief Executive Officer
$5.55M
@ $500.08 · 2025-11-25
KALATHUR RAJESH
Chief Technology Officer
$12.30M
@ $500.61 · 2025-02-18
Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives
MRK
7
Sells (3M)
21
Sells (12M)
Total value (12M): $72.01M
GUINDO CHIRFI
Officer
$1.35M
@ $135.00 · 2026-08-13
ZACHARY JENNIFER L
General Counsel
$10.72M
@ $133.46 · 2026-08-12
DELUCA RICHARD ROBERT JR.
Officer
$5.94M
@ $131.12 · 2026-08-12
GUINDO CHIRFI
Officer
$1.97M
@ $131.00 · 2026-08-06
DELUCA RICHARD ROBERT JR.
Officer
$788,773
@ $130.38 · 2026-08-06
MARALDO DAVID R.
Officer
$2.41M
@ $128.72 · 2026-08-05
WILLIAMS DAVID MICHAEL
Chief Technology Officer
$6.81M
@ $128.77 · 2026-08-05
GUINDO CHIRFI
Officer
$1.21M
@ $121.46 · 2026-02-12
LI DEAN Y
Officer
$1.20M
@ $117.52 · 2026-02-10
ZACHARY JENNIFER L
General Counsel
$14.49M
@ $119.15 · 2026-02-09
GUINDO CHIRFI
Officer
$1.18M
@ $118.41 · 2026-02-09
OOSTHUIZEN JOHANNES JACOBUS
Officer
$1.83M
@ $121.87 · 2026-02-06
WILLIAMS DAVID MICHAEL
Chief Technology Officer
$609,525
@ $121.91 · 2026-02-06
DELUCA RICHARD ROBERT JR.
Officer
$4.56M
@ $120.92 · 2026-02-06
GUINDO CHIRFI
Officer
$2.44M
@ $121.88 · 2026-02-05
SMART DALTON E. III
Officer
$765,920
@ $119.67 · 2026-02-04
LITCHFIELD CAROLINE
Chief Financial Officer
$5.02M
@ $119.61 · 2026-02-04
LI DEAN Y
Officer
$1.79M
@ $118.77 · 2026-02-04
DAVIS ROBERT M
Chief Executive Officer
$5.60M
@ $118.04 · 2026-02-04
DOWNING CRISTAL N.
Officer
$616,395
@ $87.00 · 2025-11-10
WILLIAMS DAVID MICHAEL
Chief Technology Officer
$720,040
@ $83.59 · 2025-11-03
SMART DALTON E. III
Officer
$352,723
@ $82.76 · 2025-04-25
OOSTHUIZEN JOHANNES JACOBUS
Officer
$714,745
@ $84.09 · 2025-02-19
WILLIAMS DAVID MICHAEL
Chief Technology Officer
$512,057
@ $85.34 · 2025-02-13
DOWNING CRISTAL N.
Officer
$209,551
@ $88.76 · 2025-02-06
Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives

Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.

🎭 Mr. Market's Mood

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DE
FearGreed
😏Greed(67/100)

"Market is optimistic — be cautious and ensure you have a margin of safety"

Composite sentiment score based on 6 market signals. Inspired by Buffett's "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
MRK
FearGreed
😏Greed(65/100)

"Market is optimistic — be cautious and ensure you have a margin of safety"

Composite sentiment score based on 6 market signals. Inspired by Buffett's "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.

Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.

⚖️ Buffett Signal

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DE
⚪Awaiting DCF Data

The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.

DCF Margin of Safety: N/AMr. Market's Mood: Greed (67)
MRK
⚪Awaiting DCF Data

The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.

DCF Margin of Safety: N/AMr. Market's Mood: Greed (65)
View DE Full AnalysisView MRK Full Analysis

Frequently Asked Questions: DE vs MRK

Is Deere & Company or Merck & Co., Inc. more undervalued in 2026?▼

Based on our discounted cash flow model, MRK trades at a 74.9% margin of safety (intrinsic value $596 vs. price $150), compared to DE's 26.1% margin of safety (intrinsic $914 vs. $675).

Which stock has a wider economic moat, Deere & Company or Merck & Co., Inc.?▼

MRK scores 68/100 (Narrow moat), while DE scores 50/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.

Is Deere & Company in financial distress?▼

DE's Altman Z-Score of 2.9 places it in the Grey zone, signaling elevated bankruptcy risk. MRK scores 3.7 (Safe zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.

Which stock has higher return on invested capital, Deere & Company or Merck & Co., Inc.?▼

MRK earns 22.9% ROIC versus DE's 5.5%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.

Which dividend is safer, Deere & Company's or Merck & Co., Inc.'s?▼

DE's dividend earns a safety score of 94/100 (Very Safe), compared to MRK's 79/100 (Safe). DE has raised its dividend for 3 consecutive years.