MCDONALD'S CORP (MCD) Stock Fundamental Analysis
NYSE:MCD - New York Stock Exchange, Inc. - US5801351017 - Common Stock
Overall MCD gets a fundamental rating of 6 out of 10. We evaluated MCD against 134 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 has a decent growth rate and is not valued too expensively.
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.
MCD had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 14.68%, MCD belongs to the best of the industry, outperforming 93.13% of the companies in the same industry.
The Return On Invested Capital of MCD (18.87%) is better than 91.60% 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 10.54%.
The last Return On Invested Capital (18.87%) for MCD is above the 3 year average (17.45%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.68% | ||
| ROE | N/A | ||
| ROIC | 18.87% |
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
The Profit Margin of MCD (31.79%) is better than 100.00% of its industry peers.
MCD's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 45.52%, MCD belongs to the best 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.
The Gross Margin of MCD (56.62%) is better than 67.18% of its industry peers.
MCD's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 45.52% | ||
| PM (TTM) | 31.79% | ||
| GM | 56.62% |
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), MCD is creating value.
The number of shares outstanding for MCD has been reduced compared to 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 4.72. This indicates that MCD is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 4.72, MCD belongs to the best of the industry, outperforming 87.79% of the companies in the same industry.
The Debt to FCF ratio of MCD is 6.02, which is on the high side as it means it would take MCD, 6.02 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 6.02, MCD is doing good in the industry, outperforming 70.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 6.02 | ||
| Altman-Z | 4.72 |
ROIC/WACC2.3
WACC8.2%
2.3 Liquidity
A Current Ratio of 0.78 indicates that MCD may have some problems paying its short term obligations.
The Current ratio of MCD (0.78) is worse than 60.31% of its industry peers.
MCD has a Quick Ratio of 0.78. 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 of 0.77. This is comparable to the rest of the industry: MCD outperforms 44.27% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.77 |
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%.
The Earnings Per Share has been growing by 8.75% on average over the past years. This is quite good.
The Revenue has been growing slightly by 3.69% in the past year.
Measured over the past years, MCD shows a small growth in Revenue. The Revenue has been growing by 3.70% on average per year.
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
MCD is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.22% yearly.
Based on estimates for the next years, MCD will show a small growth in Revenue. The Revenue will grow by 4.86% on average per year.
EPS Next Y-0.14%
EPS Next 2Y3.23%
EPS Next 3Y4.91%
EPS Next 5Y7.22%
Revenue Next Year2.02%
Revenue Next 2Y2.87%
Revenue Next 3Y3.68%
Revenue Next 5Y4.86%
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
A Price/Earnings ratio of 23.85 indicates a rather expensive valuation of MCD.
Compared to the rest of the industry, the Price/Earnings ratio of MCD indicates a somewhat cheap valuation: MCD is cheaper than 63.36% of the companies listed in the same industry.
MCD is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 22.21, the valuation of MCD can be described as rather expensive.
Based on the Price/Forward Earnings ratio, MCD is valued a bit cheaper than the industry average as 60.31% of the companies are valued more expensively.
MCD is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 24.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.85 | ||
| Fwd PE | 22.21 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MCD is valued a bit more expensive than 62.60% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MCD indicates a somewhat cheap valuation: MCD is cheaper than 64.12% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.78 | ||
| EV/EBITDA | 17.4 |
4.3 Compensation for Growth
MCD has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.73
EPS Next 2Y3.23%
EPS Next 3Y4.91%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.53%, MCD has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.98, MCD pays a better dividend. On top of this MCD pays more dividend than 82.44% of the companies listed in the same industry.
MCD's Dividend Yield is comparable with the S&P500 average which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.53% |
5.2 History
The dividend of MCD is nicely growing with an annual growth rate of 8.37%!
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 Years34
Div Non Decr Years34
5.3 Sustainability
MCD pays out 58.34% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of MCD is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP58.34%
EPS Next 2Y3.23%
EPS Next 3Y4.91%
MCDONALD'S CORP
NYSE:MCD (1/21/2025, 8:13:20 PM)
Premarket: 282.828 +0.22 (+0.08%)282.61
+1.66 (+0.59%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners72.06%
Inst Owner Change-0.44%
Ins Owners0.16%
Ins Owner Change-5.04%
Market Cap202.52B
Analysts76.36
Price Target332.02 (17.48%)
Short Float %1.32%
Short Ratio3.06
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.53% |
Yearly Dividend6.24
Dividend Growth(5Y)8.37%
DP58.34%
Div Incr Years34
Div Non Decr Years34
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.19%
Min EPS beat(2)-4.24%
Max EPS beat(2)-0.14%
EPS beat(4)1
Avg EPS beat(4)-0.63%
Min EPS beat(4)-4.24%
Max EPS beat(4)3.45%
EPS beat(8)5
Avg EPS beat(8)3.93%
EPS beat(12)8
Avg EPS beat(12)2.94%
EPS beat(16)11
Avg EPS beat(16)3.57%
Revenue beat(2)0
Avg Revenue beat(2)-1.49%
Min Revenue beat(2)-2.76%
Max Revenue beat(2)-0.22%
Revenue beat(4)0
Avg Revenue beat(4)-1.35%
Min Revenue beat(4)-2.76%
Max Revenue beat(4)-0.22%
Revenue beat(8)4
Avg Revenue beat(8)0.72%
Revenue beat(12)6
Avg Revenue beat(12)0.39%
Revenue beat(16)9
Avg Revenue beat(16)0.58%
PT rev (1m)0.14%
PT rev (3m)7.79%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-5.11%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.14%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.97%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)-0.09%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.85 | ||
| Fwd PE | 22.21 | ||
| P/S | 7.81 | ||
| P/FCF | 30.78 | ||
| P/OCF | 21.77 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.4 |
EPS(TTM)11.85
EY4.19%
EPS(NY)12.72
Fwd EY4.5%
FCF(TTM)9.18
FCFY3.25%
OCF(TTM)12.98
OCFY4.59%
SpS36.2
BVpS-7.22
TBVpS-11.72
PEG (NY)N/A
PEG (5Y)2.73
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.68% | ||
| ROE | N/A | ||
| ROCE | 23.68% | ||
| ROIC | 18.87% | ||
| ROICexc | 19.35% | ||
| ROICexgc | 20.72% | ||
| OM | 45.52% | ||
| PM (TTM) | 31.79% | ||
| GM | 56.62% | ||
| FCFM | 25.37% |
ROA(3y)13.78%
ROA(5y)12.6%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)17.45%
ROIC(5y)16.19%
ROICexc(3y)18.98%
ROICexc(5y)17.38%
ROICexgc(3y)20.72%
ROICexgc(5y)18.88%
ROCE(3y)21.94%
ROCE(5y)20.35%
ROICexcg growth 3Y16.09%
ROICexcg growth 5Y-2.65%
ROICexc growth 3Y15.86%
ROICexc growth 5Y-2.75%
OM growth 3Y7.08%
OM growth 5Y2.56%
PM growth 3Y10.49%
PM growth 5Y3.58%
GM growth 3Y4.01%
GM growth 5Y2.31%
F-Score5
Asset Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 6.02 | ||
| Debt/EBITDA | 2.82 | ||
| Cap/Depr | 133.5% | ||
| Cap/Sales | 10.51% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 67.19% | ||
| Profit Quality | 79.8% | ||
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.77 | ||
| Altman-Z | 4.72 |
F-Score5
WACC8.2%
ROIC/WACC2.3
Cap/Depr(3y)109.97%
Cap/Depr(5y)114.31%
Cap/Sales(3y)8.74%
Cap/Sales(5y)9.19%
Profit Quality(3y)89.54%
Profit Quality(5y)92.29%
High Growth Momentum
Growth
EPS 1Y (TTM)2.33%
EPS 3Y25.43%
EPS 5Y8.75%
EPS Q2Q%1.25%
EPS Next Y-0.14%
EPS Next 2Y3.23%
EPS Next 3Y4.91%
EPS Next 5Y7.22%
Revenue 1Y (TTM)3.69%
Revenue growth 3Y9.9%
Revenue growth 5Y3.7%
Sales Q2Q%2.7%
Revenue Next Year2.02%
Revenue Next 2Y2.87%
Revenue Next 3Y3.68%
Revenue Next 5Y4.86%
EBIT growth 1Y2.58%
EBIT growth 3Y17.68%
EBIT growth 5Y6.35%
EBIT Next Year18.39%
EBIT Next 3Y9.82%
EBIT Next 5Y8.74%
FCF growth 1Y13.55%
FCF growth 3Y16.19%
FCF growth 5Y11.42%
OCF growth 1Y18.51%
OCF growth 3Y15.33%
OCF growth 5Y6.65%