MCDONALD'S CORP (MCD) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MCD - US5801351017 - Common Stock
308.53 USD
-2.15 (-0.69%)
308.65 USD
+0.12 (+0.04%)
Overall MCD gets a fundamental rating of 6 out of 10. We evaluated MCD against 133 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 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
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
MCD has a better Return On Assets (13.88%) than 90.98% of its industry peers.
With an excellent Return On Invested Capital value of 17.77%, MCD belongs to the best of the industry, outperforming 89.47% of the companies in the same industry.
MCD had an Average Return On Invested Capital over the past 3 years of 18.38%. This is significantly above the industry average of 10.39%.
| 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 97.74% of its industry peers.
In the last couple of years the Profit Margin of MCD has grown nicely.
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.
The Gross Margin of MCD (57.43%) is better than 72.18% 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), 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.
The debt/assets ratio for MCD has remained at the same level compared to a year ago.
2.2 Solvency
MCD has an Altman-Z score of 4.81. This indicates that MCD is financially healthy and has little risk of bankruptcy at the moment.
MCD has a better Altman-Z score (4.81) than 87.22% of its industry peers.
MCD has a debt to FCF ratio of 5.60. This is a neutral value as MCD would need 5.60 years to pay back of all of its debts.
The Debt to FCF ratio of MCD (5.60) is better than 74.44% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.6 | ||
| Altman-Z | 4.81 |
ROIC/WACC2.17
WACC8.19%
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.
Looking at the Current ratio, with a value of 1.00, MCD is in line with its industry, outperforming 54.14% 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.
MCD has a Quick ratio (0.99) which 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.
The Revenue has been growing slightly by 1.26% in the past year.
MCD shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.94% yearly.
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.
Based on estimates for the next years, MCD will show a small growth in Revenue. The Revenue will grow by 5.81% on average per year.
EPS Next Y4.38%
EPS Next 2Y6.71%
EPS Next 3Y7.35%
EPS Next 5Y10.93%
Revenue Next Year2.57%
Revenue Next 2Y4.05%
Revenue Next 3Y4.41%
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
MCD is valuated quite expensively with a Price/Earnings ratio of 25.91.
MCD's Price/Earnings ratio is in line with the industry average.
MCD is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.84, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 23.10, which indicates a rather expensive current valuation of MCD.
MCD's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.40, MCD is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.91 | ||
| Fwd PE | 23.1 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MCD is valued a bit more expensive than the industry average as 63.91% of the companies are valued more cheaply.
Based on the Price/Free Cash Flow ratio, MCD is valued a bit cheaper than 63.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.8 | ||
| EV/EBITDA | 18.2 |
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.
The excellent profitability rating of MCD may justify a higher PE ratio.
PEG (NY)5.91
PEG (5Y)3.16
EPS Next 2Y6.71%
EPS Next 3Y7.35%
5. Dividend
5.1 Amount
MCD has a Yearly Dividend Yield of 2.37%.
Compared to an average industry Dividend Yield of 1.66, MCD pays a better dividend. On top of this MCD pays more dividend than 84.21% of the companies listed in the same industry.
MCD's Dividend Yield is comparable with the S&P500 average which is at 2.00.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.37% |
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.
MCD's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP60.13%
EPS Next 2Y6.71%
EPS Next 3Y7.35%
308.53
-2.15 (-0.69%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners74.95%
Inst Owner Change-1.12%
Ins Owners0.2%
Ins Owner Change-2.34%
Market Cap219.72B
Revenue(TTM)26.27B
Net Income(TTM)8.41B
Analysts71.63
Price Target342.56 (11.03%)
Short Float %0.97%
Short Ratio2.15
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.37% |
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)0.17%
PT rev (3m)-0.7%
EPS NQ rev (1m)0.08%
EPS NQ rev (3m)-2.99%
EPS NY rev (1m)-1.18%
EPS NY rev (3m)-1.83%
Revenue NQ rev (1m)-0.06%
Revenue NQ rev (3m)-0.99%
Revenue NY rev (1m)-0.23%
Revenue NY rev (3m)-0.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.91 | ||
| Fwd PE | 23.1 | ||
| P/S | 8.37 | ||
| P/FCF | 29.8 | ||
| P/OCF | 20.95 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.2 |
EPS(TTM)11.91
EY3.86%
EPS(NY)13.36
Fwd EY4.33%
FCF(TTM)10.35
FCFY3.36%
OCF(TTM)14.73
OCFY4.77%
SpS36.88
BVpS-3.04
TBVpS-7.68
PEG (NY)5.91
PEG (5Y)3.16
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 | 4.81 |
F-Score7
WACC8.19%
ROIC/WACC2.17
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 Y4.38%
EPS Next 2Y6.71%
EPS Next 3Y7.35%
EPS Next 5Y10.93%
Revenue 1Y (TTM)1.26%
Revenue growth 3Y3.73%
Revenue growth 5Y3.94%
Sales Q2Q%2.98%
Revenue Next Year2.57%
Revenue Next 2Y4.05%
Revenue Next 3Y4.41%
Revenue Next 5Y5.81%
EBIT growth 1Y2.6%
EBIT growth 3Y6.28%
EBIT growth 5Y5.78%
EBIT Next Year21.71%
EBIT Next 3Y11.38%
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 25.91 and the Price/Book (PB) ratio is -101.58.
How financially healthy is MCDONALD'S CORP?
The financial health rating of MCDONALD'S CORP (MCD) is 5 / 10.