MCDONALD'S CORP (MCD) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MCD - US5801351017 - Common Stock
315.51 USD
+2.71 (+0.87%)
314.83 USD
-0.68 (-0.22%)
We assign a fundamental rating of 6 out of 10 to MCD. MCD was compared to 132 industry peers in the Hotels, Restaurants & Leisure industry. While MCD has a great profitability rating, there are some minor concerns on its financial health. MCD is quite expensive at the moment. It does show a decent growth rate. MCD also has an excellent dividend rating. This makes MCD very considerable 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.
- In the past 5 years MCD always reported a positive cash flow from operatings.
1.2 Ratios
- MCD's Return On Assets of 13.88% is amongst the best of the industry. MCD outperforms 90.91% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 17.77%, MCD belongs to the top of the industry, outperforming 89.39% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for MCD is significantly above the industry average of 10.37%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.88% | ||
| ROE | N/A | ||
| ROIC | 17.77% |
ROA(3y)14.08%
ROA(5y)13.05%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)18.38%
ROIC(5y)16.68%
1.3 Margins
- With an excellent Profit Margin value of 32.04%, MCD belongs to the best of the industry, outperforming 97.73% of the companies in the same industry.
- In the last couple of years the Profit Margin of MCD has grown nicely.
- With an excellent Operating Margin value of 46.12%, MCD belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- In the last couple of years the Operating Margin of MCD has grown nicely.
- The Gross Margin of MCD (57.43%) is better than 72.73% of its industry peers.
- In the last couple of years the Gross Margin of MCD has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 46.12% | ||
| PM (TTM) | 32.04% | ||
| GM | 57.43% |
OM growth 3Y2.46%
OM growth 5Y1.77%
PM growth 3Y-0.79%
PM growth 5Y2.38%
GM growth 3Y1.56%
GM growth 5Y1.64%
2. Health
2.1 Basic Checks
- MCD has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- Compared to 1 year ago, MCD has less shares outstanding
- MCD has less shares outstanding than it did 5 years ago.
- MCD has about the same debt/assets ratio as last year.
2.2 Solvency
- An Altman-Z score of 4.84 indicates that MCD is not in any danger for bankruptcy at the moment.
- MCD's Altman-Z score of 4.84 is amongst the best of the industry. MCD outperforms 88.64% of its industry peers.
- The Debt to FCF ratio of MCD is 5.60, which is a neutral value as it means it would take MCD, 5.60 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of MCD (5.60) is better than 74.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.6 | ||
| Altman-Z | 4.84 |
ROIC/WACC2.22
WACC8%
2.3 Liquidity
- MCD has a Current Ratio of 1.00. 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 Current ratio value of 1.00, MCD perfoms like the industry average, outperforming 53.03% of the companies in the same industry.
- MCD has a Quick Ratio of 1.00. This is a bad value and indicates that MCD is not financially healthy enough and could expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 0.99, MCD is in line with its industry, outperforming 56.82% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1 | ||
| Quick Ratio | 0.99 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 0.51% over the past year.
- MCD shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.20% yearly.
- The Revenue has been growing slightly by 1.26% in the past year.
- Measured over the past years, MCD shows a small growth in Revenue. The Revenue has been growing by 3.94% on average per year.
EPS 1Y (TTM)0.51%
EPS 3Y8.12%
EPS 5Y8.2%
EPS Q2Q%-0.31%
Revenue 1Y (TTM)1.26%
Revenue growth 3Y3.73%
Revenue growth 5Y3.94%
Sales Q2Q%2.98%
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.
- Based on estimates for the next years, MCD will show a small growth in Revenue. The Revenue will grow by 5.51% on average per year.
EPS Next Y4.49%
EPS Next 2Y6.77%
EPS Next 3Y7.36%
EPS Next 5Y9.6%
Revenue Next Year2.58%
Revenue Next 2Y4.13%
Revenue Next 3Y4.46%
Revenue Next 5Y5.51%
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.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 26.49, the valuation of MCD can be described as expensive.
- MCD's Price/Earnings ratio is in line with the industry average.
- Compared to an average S&P500 Price/Earnings ratio of 28.39, MCD is valued at the same level.
- A Price/Forward Earnings ratio of 23.59 indicates a rather expensive valuation of MCD.
- MCD's Price/Forward Earnings is on the same level as the industry average.
- The average S&P500 Price/Forward Earnings ratio is at 25.72. MCD is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.49 | ||
| Fwd PE | 23.59 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, MCD is valued a bit more expensive than 65.15% of the companies in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of MCD is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.47 | ||
| EV/EBITDA | 18.44 |
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)5.9
PEG (5Y)3.23
EPS Next 2Y6.77%
EPS Next 3Y7.36%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.43%, MCD has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 1.21, MCD pays a better dividend. On top of this MCD pays more dividend than 82.58% of the companies listed in the same industry.
- MCD's Dividend Yield is a higher than the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.43% |
5.2 History
- The dividend of MCD is nicely growing with an annual growth rate of 7.43%!
- 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)7.43%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
- MCD pays out 60.13% of its income as dividend. This is not a sustainable payout ratio.
- MCD's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP60.13%
EPS Next 2Y6.77%
EPS Next 3Y7.36%
MCDONALD'S CORP / MCD FAQ
Can you provide the ChartMill fundamental rating for MCDONALD'S CORP?
ChartMill assigns a fundamental rating of 6 / 10 to MCD.
What is the valuation status for MCD stock?
ChartMill assigns a valuation rating of 3 / 10 to MCDONALD'S CORP (MCD). This can be considered as Overvalued.
How profitable is MCDONALD'S CORP (MCD) stock?
MCDONALD'S CORP (MCD) has a profitability rating of 8 / 10.
Can you provide the PE and PB ratios for MCD stock?
The Price/Earnings (PE) ratio for MCDONALD'S CORP (MCD) is 26.49 and the Price/Book (PB) ratio is -103.88.
Can you provide the dividend sustainability for MCD stock?
The dividend rating of MCDONALD'S CORP (MCD) is 7 / 10 and the dividend payout ratio is 60.13%.