MCDONALD'S CORP (MCD) Stock Fundamental Analysis
USA - NYSE:MCD - US5801351017 - Common Stock
299.21 USD
+2.84 (+0.96%)
299.66 USD
+0.45 (+0.15%)
Taking everything into account, MCD scores 6 out of 10 in our fundamental rating. MCD was compared to 132 industry peers in the Hotels, Restaurants & Leisure industry. MCD scores excellent on profitability, but there are some minor concerns on its financial health. While showing a medium growth rate, MCD is valued expensive at the moment. MCD also has an excellent dividend rating. These ratings would make MCD suitable for dividend investing!
1. Profitability
1.1 Basic Checks
In the past year MCD was profitable.
MCD had a positive operating cash flow in the past year.
In the past 5 years MCD has always been profitable.
In the past 5 years MCD always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 14.09%, MCD belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
MCD's Return On Invested Capital of 17.40% is amongst the best of the industry. MCD outperforms 87.88% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MCD is significantly above the industry average of 10.76%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.09% | ||
| ROE | N/A | ||
| ROIC | 17.4% |
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
Looking at the Profit Margin, with a value of 32.20%, MCD belongs to the top of the industry, outperforming 99.24% of the companies in the same industry.
MCD's Profit Margin has improved in the last couple of years.
MCD has a better Operating Margin (46.13%) than 100.00% of its industry peers.
In the last couple of years the Operating Margin of MCD has grown nicely.
The Gross Margin of MCD (57.00%) is better than 69.70% of its industry peers.
In the last couple of years the Gross Margin of MCD has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 46.13% | ||
| PM (TTM) | 32.2% | ||
| GM | 57% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so MCD is creating value.
Compared to 1 year ago, MCD has less shares outstanding
The number of shares outstanding for MCD has been reduced compared to 5 years ago.
MCD has about the same debt/assets ratio as last year.
2.2 Solvency
An Altman-Z score of 4.77 indicates that MCD is not in any danger for bankruptcy at the moment.
The Altman-Z score of MCD (4.77) is better than 86.36% of its industry peers.
MCD has a debt to FCF ratio of 6.00. This is a slightly negative value and a sign of low solvency as MCD would need 6.00 years to pay back of all of its debts.
The Debt to FCF ratio of MCD (6.00) is better than 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 6 | ||
| Altman-Z | 4.77 |
ROIC/WACC2.22
WACC7.85%
2.3 Liquidity
A Current Ratio of 1.30 indicates that MCD should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.30, MCD is in the better half of the industry, outperforming 62.88% of the companies in the same industry.
A Quick Ratio of 1.29 indicates that MCD should not have too much problems paying its short term obligations.
MCD has a better Quick ratio (1.29) than 65.91% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.3 | ||
| Quick Ratio | 1.29 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 0.93% 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.
MCD shows a small growth in Revenue. In the last year, the Revenue has grown by 1.17%.
The Revenue has been growing slightly by 3.94% on average over the past years.
EPS 1Y (TTM)0.93%
EPS 3Y8.12%
EPS 5Y8.2%
EPS Q2Q%7.41%
Revenue 1Y (TTM)1.17%
Revenue growth 3Y3.73%
Revenue growth 5Y3.94%
Sales Q2Q%5.44%
3.2 Future
The Earnings Per Share is expected to grow by 9.23% on average over the next years. This is quite good.
The Revenue is expected to grow by 5.06% on average over the next years.
EPS Next Y5.79%
EPS Next 2Y7.04%
EPS Next 3Y7.53%
EPS Next 5Y9.23%
Revenue Next Year2.84%
Revenue Next 2Y4.21%
Revenue Next 3Y4.63%
Revenue Next 5Y5.06%
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
The Price/Earnings ratio is 25.10, which means the current valuation is very expensive for MCD.
MCD's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 26.03, MCD is valued at the same level.
Based on the Price/Forward Earnings ratio of 22.26, the valuation of MCD can be described as rather expensive.
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 22.27, MCD is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.1 | ||
| Fwd PE | 22.26 |
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 65.15% of the companies listed in the same industry.
MCD's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.95 | ||
| EV/EBITDA | 17.71 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MCD does not grow enough to justify the current Price/Earnings ratio.
MCD has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)4.33
PEG (5Y)3.06
EPS Next 2Y7.04%
EPS Next 3Y7.53%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.46%, MCD has a reasonable but not impressive dividend return.
MCD's Dividend Yield is rather good when compared to the industry average which is at 4.11. MCD pays more dividend than 80.30% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, MCD has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.46% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)7.43%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
59.52% 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 more than its dividend. This makes the dividend growth sustainable.
DP59.52%
EPS Next 2Y7.04%
EPS Next 3Y7.53%
299.21
+2.84 (+0.96%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners74.98%
Inst Owner Change-0.64%
Ins Owners0.2%
Ins Owner Change-6.49%
Market Cap213.52B
Revenue(TTM)26.06B
Net Income(TTM)8.39B
Analysts72.38
Price Target341.44 (14.11%)
Short Float %1.03%
Short Ratio2.48
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.46% |
Yearly Dividend6.77
Dividend Growth(5Y)7.43%
DP59.52%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.06%
Min EPS beat(2)-0.53%
Max EPS beat(2)0.41%
EPS beat(4)1
Avg EPS beat(4)-0.35%
Min EPS beat(4)-1.13%
Max EPS beat(4)0.41%
EPS beat(8)3
Avg EPS beat(8)0.17%
EPS beat(12)7
Avg EPS beat(12)2.76%
EPS beat(16)10
Avg EPS beat(16)2.82%
Revenue beat(2)1
Avg Revenue beat(2)-1.08%
Min Revenue beat(2)-3.22%
Max Revenue beat(2)1.06%
Revenue beat(4)1
Avg Revenue beat(4)-1.05%
Min Revenue beat(4)-3.22%
Max Revenue beat(4)1.06%
Revenue beat(8)2
Avg Revenue beat(8)-1.08%
Revenue beat(12)6
Avg Revenue beat(12)0.33%
Revenue beat(16)8
Avg Revenue beat(16)0.15%
PT rev (1m)-1.03%
PT rev (3m)0.34%
EPS NQ rev (1m)-2.23%
EPS NQ rev (3m)-1.7%
EPS NY rev (1m)-0.51%
EPS NY rev (3m)0.22%
Revenue NQ rev (1m)-0.33%
Revenue NQ rev (3m)1.13%
Revenue NY rev (1m)-0.11%
Revenue NY rev (3m)1.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.1 | ||
| Fwd PE | 22.26 | ||
| P/S | 8.19 | ||
| P/FCF | 30.95 | ||
| P/OCF | 21.8 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.71 |
EPS(TTM)11.92
EY3.98%
EPS(NY)13.44
Fwd EY4.49%
FCF(TTM)9.67
FCFY3.23%
OCF(TTM)13.72
OCFY4.59%
SpS36.52
BVpS-3.87
TBVpS-8.5
PEG (NY)4.33
PEG (5Y)3.06
Graham NumberN/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.09% | ||
| ROE | N/A | ||
| ROCE | 21.76% | ||
| ROIC | 17.4% | ||
| ROICexc | 18.01% | ||
| ROICexgc | 19.2% | ||
| OM | 46.13% | ||
| PM (TTM) | 32.2% | ||
| GM | 57% | ||
| FCFM | 26.47% |
ROA(3y)14.08%
ROA(5y)13.05%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)18.38%
ROIC(5y)16.68%
ROICexc(3y)19.5%
ROICexc(5y)17.88%
ROICexgc(3y)21.29%
ROICexgc(5y)19.5%
ROCE(3y)23.04%
ROCE(5y)20.89%
ROICexgc growth 3Y2.6%
ROICexgc growth 5Y2.93%
ROICexc growth 3Y2.55%
ROICexc growth 5Y2.53%
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%
F-Score7
Asset Turnover0.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 6 | ||
| Debt/EBITDA | 2.88 | ||
| Cap/Depr | 134.76% | ||
| Cap/Sales | 11.11% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 69.11% | ||
| Profit Quality | 82.2% | ||
| Current Ratio | 1.3 | ||
| Quick Ratio | 1.29 | ||
| Altman-Z | 4.77 |
F-Score7
WACC7.85%
ROIC/WACC2.22
Cap/Depr(3y)117.68%
Cap/Depr(5y)111.18%
Cap/Sales(3y)9.38%
Cap/Sales(5y)9.09%
Profit Quality(3y)85.22%
Profit Quality(5y)89.5%
High Growth Momentum
Growth
EPS 1Y (TTM)0.93%
EPS 3Y8.12%
EPS 5Y8.2%
EPS Q2Q%7.41%
EPS Next Y5.79%
EPS Next 2Y7.04%
EPS Next 3Y7.53%
EPS Next 5Y9.23%
Revenue 1Y (TTM)1.17%
Revenue growth 3Y3.73%
Revenue growth 5Y3.94%
Sales Q2Q%5.44%
Revenue Next Year2.84%
Revenue Next 2Y4.21%
Revenue Next 3Y4.63%
Revenue Next 5Y5.06%
EBIT growth 1Y2.2%
EBIT growth 3Y6.28%
EBIT growth 5Y5.78%
EBIT Next Year22.23%
EBIT Next 3Y11.93%
EBIT Next 5Y10.03%
FCF growth 1Y3.89%
FCF growth 3Y-2.05%
FCF growth 5Y3.1%
OCF growth 1Y12.2%
OCF growth 3Y1.11%
OCF growth 5Y3.07%
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 of MCDONALD'S CORP (MCD) stock?
ChartMill assigns a valuation rating of 2 / 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.
What are the PE and PB ratios of MCDONALD'S CORP (MCD) stock?
The Price/Earnings (PE) ratio for MCDONALD'S CORP (MCD) is 25.1 and the Price/Book (PB) ratio is -77.36.
How financially healthy is MCDONALD'S CORP?
The financial health rating of MCDONALD'S CORP (MCD) is 6 / 10.