MCDONALD'S CORP (MCD) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MCD - US5801351017 - Common Stock
303.57 USD
-8.25 (-2.65%)
303.57 USD
0 (0%)
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. MCD is valied quite expensively at the moment, while it does show a decent growth rate. Finally MCD also has an excellent dividend rating. These ratings would make MCD suitable 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
The Return On Assets of MCD (13.88%) is better than 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 88.64% 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 10.42%.
| 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
MCD has a better Profit Margin (32.04%) than 97.73% of its industry peers.
MCD's Profit Margin has improved in the last couple of years.
MCD's Operating Margin of 46.12% 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 57.43% is fine compared to the rest of the industry. MCD outperforms 72.73% of its industry peers.
MCD's Gross Margin has improved in the last couple of years.
| 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.
MCD has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, MCD has less shares outstanding
Compared to 1 year ago, MCD has about the same debt to assets ratio.
2.2 Solvency
MCD has an Altman-Z score of 4.82. 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 4.82, MCD belongs to the top of the industry, outperforming 87.88% of the companies in the same industry.
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.
With a decent Debt to FCF ratio value of 5.60, MCD is doing good in the industry, outperforming 74.24% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.6 | ||
| Altman-Z | 4.82 |
ROIC/WACC2.28
WACC7.79%
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 53.79% of the companies in the same industry.
A Quick Ratio of 0.99 indicates that MCD may have some problems paying its short term obligations.
The Quick ratio of MCD (0.99) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1 | ||
| Quick Ratio | 0.99 |
3. Growth
3.1 Past
MCD shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 0.51%.
Measured over the past years, MCD shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.20% on average per year.
MCD shows a small growth in Revenue. In the last year, the Revenue has grown by 1.26%.
The Revenue has been growing slightly by 3.94% on average over the past years.
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
The Earnings Per Share is expected to grow by 10.93% on average over the next years. This is quite good.
MCD is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.81% yearly.
EPS Next Y5.63%
EPS Next 2Y6.96%
EPS Next 3Y7.48%
EPS Next 5Y10.93%
Revenue Next Year2.81%
Revenue Next 2Y4.22%
Revenue Next 3Y4.63%
Revenue Next 5Y5.81%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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
The Price/Earnings ratio is 25.49, which means the current valuation is very expensive for MCD.
MCD's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of MCD to the average of the S&P500 Index (26.31), we can say MCD is valued inline with the index average.
A Price/Forward Earnings ratio of 22.62 indicates a rather expensive valuation of MCD.
The rest of the industry has a similar Price/Forward Earnings ratio as MCD.
MCD's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 36.56.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.49 | ||
| Fwd PE | 22.62 |
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 63.64% 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 | 29.32 | ||
| EV/EBITDA | 18.26 |
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)4.53
PEG (5Y)3.11
EPS Next 2Y6.96%
EPS Next 3Y7.48%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.38%, MCD has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 7.72, MCD pays a better dividend. On top of this MCD pays more dividend than 81.06% of the companies listed in the same industry.
MCD's Dividend Yield is comparable with the S&P500 average which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.38% |
5.2 History
On average, the dividend of MCD grows each year by 7.43%, 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 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
MCD pays out 60.13% of its income as dividend. This is not a sustainable payout ratio.
The dividend of MCD is growing, but earnings are growing more, so the dividend growth is sustainable.
DP60.13%
EPS Next 2Y6.96%
EPS Next 3Y7.48%
303.57
-8.25 (-2.65%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners74.98%
Inst Owner Change-1.18%
Ins Owners0.2%
Ins Owner Change-1.98%
Market Cap216.19B
Revenue(TTM)26.27B
Net Income(TTM)8.41B
Analysts72.27
Price Target341.97 (12.65%)
Short Float %1.02%
Short Ratio2.4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.38% |
Yearly Dividend6.77
Dividend Growth(5Y)7.43%
DP60.13%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.88%
Min EPS beat(2)-4.16%
Max EPS beat(2)0.41%
EPS beat(4)1
Avg EPS beat(4)-1.35%
Min EPS beat(4)-4.16%
Max EPS beat(4)0.41%
EPS beat(8)2
Avg EPS beat(8)-0.99%
EPS beat(12)6
Avg EPS beat(12)2.17%
EPS beat(16)9
Avg EPS beat(16)1.87%
Revenue beat(2)1
Avg Revenue beat(2)-0.08%
Min Revenue beat(2)-1.23%
Max Revenue beat(2)1.06%
Revenue beat(4)1
Avg Revenue beat(4)-1.3%
Min Revenue beat(4)-3.22%
Max Revenue beat(4)1.06%
Revenue beat(8)1
Avg Revenue beat(8)-1.33%
Revenue beat(12)5
Avg Revenue beat(12)0.04%
Revenue beat(16)7
Avg Revenue beat(16)-0.04%
PT rev (1m)-1.06%
PT rev (3m)-0.69%
EPS NQ rev (1m)-1.87%
EPS NQ rev (3m)-3.13%
EPS NY rev (1m)-0.16%
EPS NY rev (3m)-0.79%
Revenue NQ rev (1m)-0.66%
Revenue NQ rev (3m)-1.12%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)-0.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.49 | ||
| Fwd PE | 22.62 | ||
| P/S | 8.23 | ||
| P/FCF | 29.32 | ||
| P/OCF | 20.61 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.26 |
EPS(TTM)11.91
EY3.92%
EPS(NY)13.42
Fwd EY4.42%
FCF(TTM)10.35
FCFY3.41%
OCF(TTM)14.73
OCFY4.85%
SpS36.88
BVpS-3.04
TBVpS-7.68
PEG (NY)4.53
PEG (5Y)3.11
Graham NumberN/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.88% | ||
| ROE | N/A | ||
| ROCE | 22.22% | ||
| ROIC | 17.77% | ||
| ROICexc | 18.59% | ||
| ROICexgc | 19.85% | ||
| OM | 46.12% | ||
| PM (TTM) | 32.04% | ||
| GM | 57.43% | ||
| FCFM | 28.08% |
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)19.49%
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 Turnover0.43
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.6 | ||
| Debt/EBITDA | 2.76 | ||
| Cap/Depr | 143.06% | ||
| Cap/Sales | 11.85% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 73.39% | ||
| Profit Quality | 87.63% | ||
| Current Ratio | 1 | ||
| Quick Ratio | 0.99 | ||
| Altman-Z | 4.82 |
F-Score7
WACC7.79%
ROIC/WACC2.28
Cap/Depr(3y)117.68%
Cap/Depr(5y)111.18%
Cap/Sales(3y)9.38%
Cap/Sales(5y)9.09%
Profit Quality(3y)85.21%
Profit Quality(5y)89.5%
High Growth Momentum
Growth
EPS 1Y (TTM)0.51%
EPS 3Y8.12%
EPS 5Y8.2%
EPS Q2Q%-0.31%
EPS Next Y5.63%
EPS Next 2Y6.96%
EPS Next 3Y7.48%
EPS Next 5Y10.93%
Revenue 1Y (TTM)1.26%
Revenue growth 3Y3.73%
Revenue growth 5Y3.94%
Sales Q2Q%2.98%
Revenue Next Year2.81%
Revenue Next 2Y4.22%
Revenue Next 3Y4.63%
Revenue Next 5Y5.81%
EBIT growth 1Y2.6%
EBIT growth 3Y6.28%
EBIT growth 5Y5.78%
EBIT Next Year22.23%
EBIT Next 3Y11.93%
EBIT Next 5Y11.55%
FCF growth 1Y2.48%
FCF growth 3Y-2.05%
FCF growth 5Y3.1%
OCF growth 1Y12.47%
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 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.
What are the PE and PB ratios of MCDONALD'S CORP (MCD) stock?
The Price/Earnings (PE) ratio for MCDONALD'S CORP (MCD) is 25.49 and the Price/Book (PB) ratio is -99.95.
How financially healthy is MCDONALD'S CORP?
The financial health rating of MCDONALD'S CORP (MCD) is 5 / 10.