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. While MCD belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. MCD is valied quite expensively at the moment, while it does show a decent growth rate. MCD also has an excellent dividend rating. With these ratings, MCD could be worth investigating further for dividend investing!.
1. Profitability
1.1 Basic Checks
MCD had positive earnings in the past year.
In the past year MCD had a positive cash flow from operations.
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
Looking at the Return On Assets, with a value of 15.44%, MCD belongs to the top of the industry, outperforming 94.03% of the companies in the same industry.
The Return On Invested Capital of MCD (18.79%) is better than 92.54% of its industry peers.
MCD had an Average Return On Invested Capital over the past 3 years of 17.45%. This is significantly above the industry average of 10.59%.
The last Return On Invested Capital (18.79%) for MCD is above the 3 year average (17.45%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.44% | ||
| ROE | N/A | ||
| ROIC | 18.79% |
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 has a better Profit Margin (32.25%) than 100.00% of its industry peers.
MCD's Profit Margin has improved in the last couple of years.
MCD's Operating Margin of 45.67% is amongst the best of 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's Gross Margin of 56.97% is fine compared to the rest of the industry. MCD outperforms 65.67% of its industry peers.
MCD's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 45.67% | ||
| PM (TTM) | 32.25% | ||
| GM | 56.97% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so MCD is creating value.
MCD has less shares outstanding than it did 1 year ago.
The number of shares outstanding for MCD has been reduced compared to 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 5.05. This indicates that MCD is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.05, MCD belongs to the top of the industry, outperforming 88.06% of the companies in the same industry.
MCD has a debt to FCF ratio of 5.43. This is a neutral value as MCD would need 5.43 years to pay back of all of its debts.
MCD has a better Debt to FCF ratio (5.43) than 75.37% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.43 | ||
| Altman-Z | 5.05 |
ROIC/WACC2.33
WACC8.08%
2.3 Liquidity
MCD has a Current Ratio of 1.08. 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 decent Current ratio value of 1.08, MCD is doing good in the industry, outperforming 61.19% of the companies in the same industry.
MCD has a Quick Ratio of 1.06. This is a normal value and indicates that MCD is financially healthy and should not expect problems in meeting its short term obligations.
MCD has a Quick ratio of 1.06. This is in the better half of the industry: MCD outperforms 63.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.08 | ||
| Quick Ratio | 1.06 |
3. Growth
3.1 Past
MCD shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.33%.
Measured over the past years, MCD shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.75% on average per year.
MCD shows a small growth in Revenue. In the last year, the Revenue has grown by 3.69%.
MCD shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.70% yearly.
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
Based on estimates for the next years, MCD will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.46% on average per year.
The Revenue is expected to grow by 5.85% on average over the next years.
EPS Next Y-0.06%
EPS Next 2Y3.3%
EPS Next 3Y4.93%
EPS Next 5Y9.46%
Revenue Next Year2.06%
Revenue Next 2Y2.85%
Revenue Next 3Y3.74%
Revenue Next 5Y5.85%
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
A Price/Earnings ratio of 24.69 indicates a rather expensive valuation of MCD.
63.43% of the companies in the same industry are more expensive than MCD, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 28.53. MCD is around the same levels.
Based on the Price/Forward Earnings ratio of 22.97, the valuation of MCD can be described as rather expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as MCD.
The average S&P500 Price/Forward Earnings ratio is at 23.40. MCD is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.69 | ||
| Fwd PE | 22.97 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MCD is valued a bit more expensive than 64.93% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, MCD is valued a bit cheaper than the industry average as 64.18% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.55 | ||
| EV/EBITDA | 17.97 |
4.3 Compensation for Growth
MCD has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.82
EPS Next 2Y3.3%
EPS Next 3Y4.93%
5. Dividend
5.1 Amount
MCD has a Yearly Dividend Yield of 2.37%. Purely for dividend investing, there may be better candidates out there.
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.
MCD's Dividend Yield is comparable with the S&P500 average which is at 2.22.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.37% |
5.2 History
On average, the dividend of MCD grows each year by 8.37%, which is quite nice.
MCD has been paying a dividend for at least 10 years, so it has 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 Years33
Div Non Decr Years33
5.3 Sustainability
MCD pays out 56.79% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of MCD is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP56.79%
EPS Next 2Y3.3%
EPS Next 3Y4.93%
MCDONALD'S CORP
NYSE:MCD (11/15/2024, 8:24:46 PM)
After market: 292.83 +0.2 (+0.07%)292.63
-5.93 (-1.99%)
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 Cap209.70B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.37% |
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)
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EPS beat(12)
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EPS beat(16)
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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 | 24.69 | ||
| Fwd PE | 22.97 | ||
| 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)N/A
PEG (5Y)2.82
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.44% | ||
| ROE | N/A | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 45.67% | ||
| PM (TTM) | 32.25% | ||
| GM | 56.97% | ||
| 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 Turnover0.48
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 | 1.08 | ||
| Quick Ratio | 1.06 | ||
| 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)
High Growth Momentum
Growth
EPS 1Y (TTM)2.33%
EPS 3Y25.43%
EPS 5Y
EPS Q2Q%
EPS Next Y-0.06%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)3.69%
Revenue growth 3Y9.9%
Revenue growth 5Y
Sales 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