MCDONALD'S CORP (MCD)
US5801351017 - Common Stock
We assign a fundamental rating of 6 out of 10 to MCD. MCD was compared to 135 industry peers in the Hotels, Restaurants & Leisure industry. MCD has an excellent profitability rating, but there are some minor concerns on its financial health. While showing a medium growth rate, MCD is valued expensive at the moment. Finally MCD also has an excellent dividend rating. These ratings could make MCD a good candidate for dividend investing.
1. Profitability
1.1 Basic Checks
MCD had positive earnings in the past year.
MCD had a positive operating cash flow in the past year.
Each year in the past 5 years MCD has been profitable.
MCD had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 15.08%, MCD belongs to the best of the industry, outperforming 91.79% of the companies in the same industry.
MCD's Return On Invested Capital of 18.86% is amongst the best of the industry. MCD outperforms 91.79% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MCD is significantly above the industry average of 9.90%.
The 3 year average ROIC (17.45%) for MCD is below the current ROIC(18.86%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.08% | ||
| ROE | N/A | ||
| ROIC | 18.86% |
ROA(3y)13.78%
ROA(5y)12.6%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)17.45%
ROIC(5y)16.19%
1.3 Margins
With an excellent Profit Margin value of 33.22%, MCD belongs to the best of the industry, outperforming 99.25% of the companies in the same industry.
MCD's Profit Margin has improved in the last couple of years.
MCD has a Operating Margin of 46.07%. This is amongst the best in the industry. MCD outperforms 100.00% of its industry peers.
In the last couple of years the Operating Margin of MCD has grown nicely.
MCD has a Gross Margin of 57.12%. This is in the better half of the industry: MCD outperforms 63.43% of its industry peers.
MCD's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 46.07% | ||
| PM (TTM) | 33.22% | ||
| GM | 57.12% |
OM growth 3Y7.08%
OM growth 5Y2.56%
PM growth 3Y10.49%
PM growth 5Y3.58%
GM growth 3Y4.01%
GM growth 5Y2.31%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), MCD is creating value.
MCD has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, MCD has less shares outstanding
The debt/assets ratio for MCD is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 4.69 indicates that MCD is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 4.69, MCD belongs to the best of the industry, outperforming 88.81% of the companies in the same industry.
The Debt to FCF ratio of MCD is 5.64, which is a neutral value as it means it would take MCD, 5.64 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 5.64, MCD is in the better half of the industry, outperforming 71.64% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.64 | ||
| Altman-Z | 4.69 |
ROIC/WACC2.31
WACC8.15%
2.3 Liquidity
A Current Ratio of 1.16 indicates that MCD should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.16, MCD is in line with its industry, outperforming 56.72% of the companies in the same industry.
MCD has a Quick Ratio of 1.16. This is a normal value and indicates that MCD is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.16, MCD perfoms like the industry average, outperforming 58.96% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.16 | ||
| Quick Ratio | 1.16 |
3. Growth
3.1 Past
MCD shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 14.93%, which is quite good.
The Earnings Per Share has been growing by 8.75% on average over the past years. This is quite good.
MCD shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.04%.
MCD shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.70% yearly.
EPS 1Y (TTM)14.93%
EPS 3Y25.43%
EPS 5Y8.75%
EPS growth Q2Q2.66%
Revenue 1Y (TTM)10.04%
Revenue growth 3Y9.9%
Revenue growth 5Y3.7%
Revenue growth Q2Q4.6%
3.2 Future
Based on estimates for the next years, MCD will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.60% on average per year.
The Revenue is expected to grow by 6.09% on average over the next years.
EPS Next Y5.11%
EPS Next 2Y7.07%
EPS Next 3Y7.78%
EPS Next 5Y9.6%
Revenue Next Year5.27%
Revenue Next 2Y5.65%
Revenue Next 3Y5.92%
Revenue Next 5Y6.09%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 22.68 indicates a rather expensive valuation of MCD.
Compared to the rest of the industry, the Price/Earnings ratio of MCD is on the same level as its industry peers.
When comparing the Price/Earnings ratio of MCD to the average of the S&P500 Index (28.60), we can say MCD is valued slightly cheaper.
A Price/Forward Earnings ratio of 19.90 indicates a rather expensive valuation of MCD.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MCD is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.15, MCD is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.68 | ||
| Fwd PE | 19.9 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MCD indicates a slightly more expensive valuation: MCD is more expensive than 65.67% of the companies listed in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as MCD.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.07 | ||
| EV/EBITDA | 16.93 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
MCD has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)4.44
PEG (5Y)2.59
EPS Next 2Y7.07%
EPS Next 3Y7.78%
5. Dividend
5.1 Amount
MCD has a Yearly Dividend Yield of 2.49%. Purely for dividend investing, there may be better candidates out there.
MCD's Dividend Yield is rather good when compared to the industry average which is at 2.75. MCD pays more dividend than 83.58% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.32, MCD has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.49% |
5.2 History
On average, the dividend of MCD grows each year by 8.37%, which is quite nice.
MCD has paid a dividend for at least 10 years, which is a reliable track record.
MCD has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)8.37%
Div Incr Years19
Div Non Decr Years19
5.3 Sustainability
53.52% of the earnings are spent on dividend by MCD. This is a bit on the high side, but may be sustainable.
MCD's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP53.52%
EPS Next 2Y7.07%
EPS Next 3Y7.78%
MCDONALD'S CORP
NYSE:MCD (5/17/2024, 7:12:16 PM)
After market: 272.38 0 (0%)272.38
-1.13 (-0.41%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap196.39B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.49% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
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Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.68 | ||
| Fwd PE | 19.9 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)4.44
PEG (5Y)2.59
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.08% | ||
| ROE | N/A | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 46.07% | ||
| PM (TTM) | 33.22% | ||
| GM | 57.12% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.45
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.16 | ||
| Quick Ratio | 1.16 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)14.93%
EPS 3Y25.43%
EPS 5Y
EPS growth Q2Q
EPS Next Y5.11%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)10.04%
Revenue growth 3Y9.9%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y