MCDONALD'S CORP (MCD) Stock Fundamental Analysis
USA - NYSE:MCD - US5801351017 - Common Stock
304.97 USD
+1.68 (+0.55%)
305.01 USD
+0.04 (+0.01%)
Taking everything into account, MCD scores 6 out of 10 in our fundamental rating. MCD was compared to 133 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. While showing a medium growth rate, MCD is valued expensive at the moment. Finally MCD also has an excellent dividend rating. This makes MCD very considerable 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.
MCD had positive earnings in each of the past 5 years.
Each year in the past 5 years MCD had a positive operating cash flow.
1.2 Ratios
MCD's Return On Assets of 14.09% is amongst the best of the industry. MCD outperforms 90.98% of its industry peers.
The Return On Invested Capital of MCD (17.40%) is better than 87.22% of its industry peers.
MCD had an Average Return On Invested Capital over the past 3 years of 18.38%. This is above the industry average of 15.68%.
| 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
With an excellent Profit Margin value of 32.20%, MCD belongs to the best of the industry, outperforming 99.25% of the companies in the same industry.
MCD's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 46.13%, 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 Gross Margin of 57.00%. This is in the better half of the industry: MCD outperforms 68.42% 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.
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 4.82. This indicates that MCD is financially healthy and has little risk of bankruptcy at the moment.
MCD's Altman-Z score of 4.82 is amongst the best of the industry. MCD outperforms 84.96% of its industry peers.
The Debt to FCF ratio of MCD is 6.00, which is on the high side as it means it would take MCD, 6.00 years of fcf income to pay off all of its debts.
MCD's Debt to FCF ratio of 6.00 is fine compared to the rest of the industry. MCD outperforms 72.93% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 6 | ||
| Altman-Z | 4.82 |
ROIC/WACC2.03
WACC8.56%
2.3 Liquidity
A Current Ratio of 1.30 indicates that MCD should not have too much problems paying its short term obligations.
MCD's Current ratio of 1.30 is fine compared to the rest of the industry. MCD outperforms 64.66% of its industry peers.
A Quick Ratio of 1.29 indicates that MCD should not have too much problems paying its short term obligations.
The Quick ratio of MCD (1.29) is better than 66.92% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.3 | ||
| Quick Ratio | 1.29 |
3. Growth
3.1 Past
MCD shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 0.93%.
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 1.17%.
MCD shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.94% yearly.
EPS 1Y (TTM)0.93%
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 9.09% 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 5.07% on average per year.
EPS Next Y6.48%
EPS Next 2Y7.58%
EPS Next 3Y7.9%
EPS Next 5Y9.09%
Revenue Next Year2.93%
Revenue Next 2Y4.22%
Revenue Next 3Y4.66%
Revenue Next 5Y5.07%
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.
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
Based on the Price/Earnings ratio of 25.58, the valuation of MCD can be described as expensive.
60.90% of the companies in the same industry are more expensive than MCD, based on the Price/Earnings ratio.
MCD is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.20, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 22.46, which indicates a rather expensive current valuation of MCD.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MCD is on the same level as its industry peers.
MCD's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.70.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.58 | ||
| Fwd PE | 22.46 |
4.2 Price Multiples
MCD's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. MCD is more expensive than 60.15% of the companies in the same industry.
60.15% of the companies in the same industry are more expensive than MCD, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.55 | ||
| EV/EBITDA | 18.06 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of MCD may justify a higher PE ratio.
PEG (NY)3.95
PEG (5Y)3.12
EPS Next 2Y7.58%
EPS Next 3Y7.9%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.30%, MCD has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.93, MCD pays a better dividend. On top of this MCD pays more dividend than 81.95% of the companies listed in the same industry.
MCD's Dividend Yield is comparable with the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.3% |
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 2Y7.58%
EPS Next 3Y7.9%
304.97
+1.68 (+0.55%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners75.63%
Inst Owner Change-1.57%
Ins Owners0.2%
Ins Owner Change-6.15%
Market Cap217.63B
Analysts72.56
Price Target344.98 (13.12%)
Short Float %1.06%
Short Ratio2.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.3% |
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)1.53%
PT rev (3m)0.45%
EPS NQ rev (1m)-0.14%
EPS NQ rev (3m)1.02%
EPS NY rev (1m)0.87%
EPS NY rev (3m)0.63%
Revenue NQ rev (1m)-0.06%
Revenue NQ rev (3m)2.1%
Revenue NY rev (1m)1.13%
Revenue NY rev (3m)1.52%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.58 | ||
| Fwd PE | 22.46 | ||
| P/S | 8.35 | ||
| P/FCF | 31.55 | ||
| P/OCF | 22.22 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.06 |
EPS(TTM)11.92
EY3.91%
EPS(NY)13.58
Fwd EY4.45%
FCF(TTM)9.67
FCFY3.17%
OCF(TTM)13.72
OCFY4.5%
SpS36.52
BVpS-3.87
TBVpS-8.5
PEG (NY)3.95
PEG (5Y)3.12
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%
ROICexcg growth 3Y2.6%
ROICexcg 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 | 4.82 |
F-Score7
WACC8.56%
ROIC/WACC2.03
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 Y6.48%
EPS Next 2Y7.58%
EPS Next 3Y7.9%
EPS Next 5Y9.09%
Revenue 1Y (TTM)1.17%
Revenue growth 3Y3.73%
Revenue growth 5Y3.94%
Sales Q2Q%5.44%
Revenue Next Year2.93%
Revenue Next 2Y4.22%
Revenue Next 3Y4.66%
Revenue Next 5Y5.07%
EBIT growth 1Y2.2%
EBIT growth 3Y6.28%
EBIT growth 5Y5.78%
EBIT Next Year21.26%
EBIT Next 3Y11.72%
EBIT Next 5Y9.93%
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%