MCDONALD'S CORP (MCD) Stock Fundamental Analysis
USA - NYSE:MCD - US5801351017 - Common Stock
306.94 USD
+0.11 (+0.04%)
306.5 USD
-0.44 (-0.14%)
MCD gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 132 industry peers in the Hotels, Restaurants & Leisure industry. While MCD has a great profitability rating, 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. With these ratings, MCD could be worth investigating further for dividend investing!.
1. Profitability
1.1 Basic Checks
In the past year MCD was profitable.
In the past year MCD had a positive cash flow from operations.
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 13.88% is amongst the best of the industry. MCD outperforms 90.91% of its industry peers.
The Return On Invested Capital of MCD (17.77%) is better than 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 10.74%.
| 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
The Profit Margin of MCD (32.04%) is better than 99.24% of its industry peers.
In the last couple of years the Profit Margin of MCD has grown nicely.
With an excellent Operating Margin value of 46.12%, MCD belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Operating Margin of MCD has grown nicely.
With a decent Gross Margin value of 57.43%, MCD is doing good in the industry, outperforming 71.21% of the companies in the same industry.
In the last couple of years the Gross Margin of MCD has grown nicely.
| 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so 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.
MCD has about the same debt/assets ratio as last year.
2.2 Solvency
MCD has an Altman-Z score of 4.79. This indicates that MCD is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of MCD (4.79) is better than 88.64% of its industry peers.
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 | 4.79 |
ROIC/WACC2.26
WACC7.87%
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.
MCD has a Current ratio (1.00) which is comparable to the rest of the industry.
A Quick Ratio of 0.99 indicates that MCD may have some problems paying its short term obligations.
MCD has a Quick ratio (0.99) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1 | ||
| Quick Ratio | 0.99 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 0.51% over the past year.
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.
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
Based on estimates for the next years, MCD will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.23% on average per year.
Based on estimates for the next years, MCD will show a small growth in Revenue. The Revenue will grow by 5.06% on average per year.
EPS Next Y5.63%
EPS Next 2Y6.96%
EPS Next 3Y7.48%
EPS Next 5Y9.23%
Revenue Next Year2.81%
Revenue Next 2Y4.22%
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.
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
With a Price/Earnings ratio of 25.77, MCD can be considered very expensive at the moment.
MCD's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 26.34. MCD is around the same levels.
A Price/Forward Earnings ratio of 22.87 indicates a rather expensive valuation of MCD.
MCD's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 34.43, MCD is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.77 | ||
| Fwd PE | 22.87 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MCD is valued a bit more expensive than the industry average as 64.39% of the companies are valued more cheaply.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MCD is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.7 | ||
| EV/EBITDA | 18.04 |
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)4.58
PEG (5Y)3.14
EPS Next 2Y6.96%
EPS Next 3Y7.48%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.49%, 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 4.34. MCD pays more dividend than 80.30% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, MCD has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.49% |
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%
306.94
+0.11 (+0.04%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners74.98%
Inst Owner Change-1.52%
Ins Owners0.2%
Ins Owner Change-1.5%
Market Cap219.03B
Revenue(TTM)26.27B
Net Income(TTM)8.41B
Analysts72.27
Price Target341.44 (11.24%)
Short Float %1.03%
Short Ratio2.48
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.49% |
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)-1.21%
PT rev (3m)0.49%
EPS NQ rev (1m)-2.72%
EPS NQ rev (3m)-1.78%
EPS NY rev (1m)-0.66%
EPS NY rev (3m)0.07%
Revenue NQ rev (1m)-0.94%
Revenue NQ rev (3m)0.73%
Revenue NY rev (1m)-0.14%
Revenue NY rev (3m)1.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.77 | ||
| Fwd PE | 22.87 | ||
| P/S | 8.34 | ||
| P/FCF | 29.7 | ||
| P/OCF | 20.89 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.04 |
EPS(TTM)11.91
EY3.88%
EPS(NY)13.42
Fwd EY4.37%
FCF(TTM)10.33
FCFY3.37%
OCF(TTM)14.7
OCFY4.79%
SpS36.81
BVpS-3.03
TBVpS-7.66
PEG (NY)4.58
PEG (5Y)3.14
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 | 4.79 |
F-Score7
WACC7.87%
ROIC/WACC2.26
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 5Y9.23%
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 5Y5.06%
EBIT growth 1Y2.6%
EBIT growth 3Y6.28%
EBIT growth 5Y5.78%
EBIT Next Year22.23%
EBIT Next 3Y11.93%
EBIT Next 5Y9.88%
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 25.77 and the Price/Book (PB) ratio is -101.26.
How financially healthy is MCDONALD'S CORP?
The financial health rating of MCDONALD'S CORP (MCD) is 5 / 10.