MCDONALD'S CORP (MCD)
US5801351017 - Common Stock
Taking everything into account, MCD scores 5 out of 10 in our fundamental rating. MCD was compared to 134 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.
1. Profitability
1.1 Basic Checks
In the past year MCD was profitable.
In the past year MCD had a positive cash flow from operations.
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
MCD has a better Return On Assets (14.68%) than 93.28% of its industry peers.
MCD has a Return On Invested Capital of 18.87%. This is amongst the best in the industry. MCD outperforms 91.79% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MCD is significantly above the industry average of 10.50%.
The last Return On Invested Capital (18.87%) for MCD is above the 3 year average (17.45%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.68% | ||
| ROE | N/A | ||
| ROIC | 18.87% |
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
MCD's Profit Margin of 31.79% is amongst the best of the industry. MCD outperforms 100.00% of its industry peers.
MCD's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 45.52%, MCD belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
MCD's Operating Margin has improved in the last couple of years.
MCD has a better Gross Margin (56.62%) than 65.67% of its industry peers.
MCD's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 45.52% | ||
| PM (TTM) | 31.79% | ||
| GM | 56.62% |
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.
The number of shares outstanding for MCD has been reduced compared to 1 year ago.
MCD has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, MCD has a worse debt to assets ratio.
2.2 Solvency
MCD has an Altman-Z score of 4.78. This indicates that MCD is financially healthy and has little risk of bankruptcy at the moment.
MCD's Altman-Z score of 4.78 is amongst the best of the industry. MCD outperforms 87.31% of its industry peers.
MCD has a debt to FCF ratio of 6.02. This is a slightly negative value and a sign of low solvency as MCD would need 6.02 years to pay back of all of its debts.
MCD has a better Debt to FCF ratio (6.02) than 70.15% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 6.02 | ||
| Altman-Z | 4.78 |
ROIC/WACC2.32
WACC8.13%
2.3 Liquidity
A Current Ratio of 0.78 indicates that MCD may have some problems paying its short term obligations.
The Current ratio of MCD (0.78) is worse than 60.45% of its industry peers.
A Quick Ratio of 0.77 indicates that MCD may have some problems paying its short term obligations.
The Quick ratio of MCD (0.77) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.77 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 2.33% 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 8.75% yearly.
Looking at the last year, MCD shows a small growth in Revenue. The Revenue has grown by 3.69% in the last year.
The Revenue has been growing slightly by 3.70% on average over the past years.
EPS 1Y (TTM)2.33%
EPS 3Y25.43%
EPS 5Y8.75%
EPS Q2Q%1.25%
Revenue 1Y (TTM)3.69%
Revenue growth 3Y9.9%
Revenue growth 5Y3.7%
Sales Q2Q%2.7%
3.2 Future
The Earnings Per Share is expected to grow by 7.22% on average over the next years.
MCD is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.86% yearly.
EPS Next Y-0.09%
EPS Next 2Y3.27%
EPS Next 3Y4.93%
EPS Next 5Y7.22%
Revenue Next Year2.06%
Revenue Next 2Y2.84%
Revenue Next 3Y3.74%
Revenue Next 5Y4.86%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
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
The Price/Earnings ratio is 24.88, which indicates a rather expensive current valuation of MCD.
Based on the Price/Earnings ratio, MCD is valued a bit cheaper than the industry average as 61.94% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of MCD to the average of the S&P500 Index (27.42), we can say MCD is valued inline with the index average.
With a Price/Forward Earnings ratio of 23.15, MCD is valued on the expensive side.
MCD's Price/Forward Earnings is on the same level as the industry average.
MCD's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.56.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.88 | ||
| Fwd PE | 23.15 |
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 63.43% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MCD indicates a somewhat cheap valuation: MCD is cheaper than 61.19% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.11 | ||
| EV/EBITDA | 17.79 |
4.3 Compensation for Growth
The excellent profitability rating of MCD may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.84
EPS Next 2Y3.27%
EPS Next 3Y4.93%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.39%, MCD has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.82, MCD pays a better dividend. On top of this MCD pays more dividend than 83.58% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.24, MCD has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.39% |
5.2 History
The dividend of MCD is nicely growing with an annual growth rate of 8.37%!
MCD has been paying a dividend for at least 10 years, so it has a reliable track record.
MCD has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)8.37%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
58.34% of the earnings are spent on dividend by MCD. This is a bit on the high side, but may be sustainable.
The dividend of MCD is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP58.34%
EPS Next 2Y3.27%
EPS Next 3Y4.93%
MCDONALD'S CORP
NYSE:MCD (12/20/2024, 3:05:00 PM)
294.775
+4.54 (+1.57%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners72.12%
Inst Owner Change2.86%
Ins Owners0.09%
Ins Owner Change-3.92%
Market Cap211.24B
Analysts76.36
Price Target331.54 (12.47%)
Short Float %1.39%
Short Ratio2.71
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.39% |
Dividend Growth(5Y)8.37%
DP58.34%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.19%
Min EPS beat(2)-4.24%
Max EPS beat(2)-0.14%
EPS beat(4)1
Avg EPS beat(4)-0.63%
Min EPS beat(4)-4.24%
Max EPS beat(4)3.45%
EPS beat(8)5
Avg EPS beat(8)3.93%
EPS beat(12)8
Avg EPS beat(12)2.94%
EPS beat(16)11
Avg EPS beat(16)3.57%
Revenue beat(2)0
Avg Revenue beat(2)-1.49%
Min Revenue beat(2)-2.76%
Max Revenue beat(2)-0.22%
Revenue beat(4)0
Avg Revenue beat(4)-1.35%
Min Revenue beat(4)-2.76%
Max Revenue beat(4)-0.22%
Revenue beat(8)4
Avg Revenue beat(8)0.72%
Revenue beat(12)6
Avg Revenue beat(12)0.39%
Revenue beat(16)9
Avg Revenue beat(16)0.58%
PT rev (1m)2.52%
PT rev (3m)8.79%
EPS NQ rev (1m)-0.03%
EPS NQ rev (3m)-5.11%
EPS NY rev (1m)-0.03%
EPS NY rev (3m)-0.08%
Revenue NQ rev (1m)-0.03%
Revenue NQ rev (3m)-3.97%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.88 | ||
| Fwd PE | 23.15 | ||
| P/S | 8.14 | ||
| P/FCF | 32.11 | ||
| P/OCF | 22.7 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.79 |
EPS(TTM)11.85
EY4.02%
EPS(NY)12.73
Fwd EY4.32%
FCF(TTM)9.18
FCFY3.11%
OCF(TTM)12.98
OCFY4.4%
SpS36.2
BVpS-7.22
TBVpS-11.72
PEG (NY)N/A
PEG (5Y)2.84
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.68% | ||
| ROE | N/A | ||
| ROCE | 23.68% | ||
| ROIC | 18.87% | ||
| ROICexc | 19.35% | ||
| ROICexgc | 20.72% | ||
| OM | 45.52% | ||
| PM (TTM) | 31.79% | ||
| GM | 56.62% | ||
| FCFM | 25.37% |
ROA(3y)13.78%
ROA(5y)12.6%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)17.45%
ROIC(5y)16.19%
ROICexc(3y)18.98%
ROICexc(5y)17.38%
ROICexgc(3y)20.72%
ROICexgc(5y)18.88%
ROCE(3y)21.94%
ROCE(5y)20.35%
ROICexcg growth 3Y16.09%
ROICexcg growth 5Y-2.65%
ROICexc growth 3Y15.86%
ROICexc growth 5Y-2.75%
OM growth 3Y7.08%
OM growth 5Y2.56%
PM growth 3Y10.49%
PM growth 5Y3.58%
GM growth 3Y4.01%
GM growth 5Y2.31%
F-Score5
Asset Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 6.02 | ||
| Debt/EBITDA | 2.82 | ||
| Cap/Depr | 133.5% | ||
| Cap/Sales | 10.51% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 67.19% | ||
| Profit Quality | 79.8% | ||
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.77 | ||
| Altman-Z | 4.78 |
F-Score5
WACC8.13%
ROIC/WACC2.32
Cap/Depr(3y)109.97%
Cap/Depr(5y)114.31%
Cap/Sales(3y)8.74%
Cap/Sales(5y)9.19%
Profit Quality(3y)89.54%
Profit Quality(5y)92.29%
High Growth Momentum
Growth
EPS 1Y (TTM)2.33%
EPS 3Y25.43%
EPS 5Y8.75%
EPS Q2Q%1.25%
EPS Next Y-0.09%
EPS Next 2Y3.27%
EPS Next 3Y4.93%
EPS Next 5Y7.22%
Revenue 1Y (TTM)3.69%
Revenue growth 3Y9.9%
Revenue growth 5Y3.7%
Sales Q2Q%2.7%
Revenue Next Year2.06%
Revenue Next 2Y2.84%
Revenue Next 3Y3.74%
Revenue Next 5Y4.86%
EBIT growth 1Y2.58%
EBIT growth 3Y17.68%
EBIT growth 5Y6.35%
EBIT Next Year18.52%
EBIT Next 3Y9.92%
EBIT Next 5Y8.74%
FCF growth 1Y13.55%
FCF growth 3Y16.19%
FCF growth 5Y11.42%
OCF growth 1Y18.51%
OCF growth 3Y15.33%
OCF growth 5Y6.65%