MCDONALD'S CORP (MCD) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MCD - US5801351017 - Common Stock
306.75 USD
-0.57 (-0.19%)
306.33 USD
-0.42 (-0.14%)
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 belongs to the best of the industry regarding profitability, 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.
Each year in the past 5 years MCD had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 13.88%, MCD belongs to the top of the industry, outperforming 90.98% of the companies in the same industry.
The Return On Invested Capital of MCD (17.77%) is better than 89.47% of its industry peers.
MCD had an Average Return On Invested Capital over the past 3 years of 18.38%. This is significantly above the industry average of 10.34%.
| 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 Profit Margin of 32.04%. This is amongst the best in the industry. MCD outperforms 97.74% of its industry peers.
In the last couple of years the Profit Margin of MCD has grown nicely.
The Operating Margin of MCD (46.12%) is better than 100.00% of its industry peers.
MCD's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 57.43%, MCD is doing good in the industry, outperforming 72.18% of the companies in the same industry.
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
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.
Compared to 1 year ago, MCD has about the same debt to assets ratio.
2.2 Solvency
MCD has an Altman-Z score of 4.79. This indicates that MCD is financially healthy and has little risk of bankruptcy at the moment.
MCD's Altman-Z score of 4.79 is amongst the best of the industry. MCD outperforms 87.97% 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.
MCD has a Debt to FCF ratio of 5.60. This is in the better half of the industry: MCD outperforms 74.44% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.6 | ||
| Altman-Z | 4.79 |
ROIC/WACC2.25
WACC7.91%
2.3 Liquidity
A Current Ratio of 1.00 indicates that MCD should not have too much problems paying its short term obligations.
With a Current ratio value of 1.00, MCD perfoms like the industry average, outperforming 54.14% 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.
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.
Looking at the last year, MCD shows a small growth in Revenue. The Revenue has grown by 1.26% in the last 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
The Earnings Per Share is expected to grow by 9.60% 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 5.51% yearly.
EPS Next Y4.38%
EPS Next 2Y6.71%
EPS Next 3Y7.35%
EPS Next 5Y9.6%
Revenue Next Year2.57%
Revenue Next 2Y4.05%
Revenue Next 3Y4.41%
Revenue Next 5Y5.51%
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
The Price/Earnings ratio is 25.76, which means the current valuation is very expensive for MCD.
Compared to the rest of the industry, the Price/Earnings ratio of MCD indicates a somewhat cheap valuation: MCD is cheaper than 60.90% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.25, MCD is valued at the same level.
With a Price/Forward Earnings ratio of 22.97, MCD is valued on the expensive side.
MCD's Price/Forward Earnings ratio is in line with the industry average.
MCD's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 23.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.76 | ||
| Fwd PE | 22.97 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MCD is valued a bit more expensive than 64.66% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, MCD is valued a bit cheaper than 63.16% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.62 | ||
| EV/EBITDA | 18.04 |
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)5.88
PEG (5Y)3.14
EPS Next 2Y6.71%
EPS Next 3Y7.35%
5. Dividend
5.1 Amount
MCD has a Yearly Dividend Yield of 2.41%.
MCD's Dividend Yield is rather good when compared to the industry average which is at 6.32. MCD pays more dividend than 82.71% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.92, MCD pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.41% |
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 2Y6.71%
EPS Next 3Y7.35%
306.75
-0.57 (-0.19%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners74.96%
Inst Owner Change0.09%
Ins Owners0.2%
Ins Owner Change-2.18%
Market Cap218.45B
Revenue(TTM)26.27B
Net Income(TTM)8.41B
Analysts71.63
Price Target342.56 (11.67%)
Short Float %1.16%
Short Ratio2.57
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.41% |
Yearly Dividend6.77
Dividend Growth(5Y)7.43%
DP60.13%
Div Incr Years34
Div Non Decr Years34
Ex-DateN/A
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)0.14%
PT rev (3m)-0.89%
EPS NQ rev (1m)0.19%
EPS NQ rev (3m)-2.9%
EPS NY rev (1m)-0.05%
EPS NY rev (3m)-1.83%
Revenue NQ rev (1m)-0.07%
Revenue NQ rev (3m)-1.04%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-0.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.76 | ||
| Fwd PE | 22.97 | ||
| P/S | 8.32 | ||
| P/FCF | 29.62 | ||
| P/OCF | 20.83 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.04 |
EPS(TTM)11.91
EY3.88%
EPS(NY)13.36
Fwd EY4.35%
FCF(TTM)10.35
FCFY3.38%
OCF(TTM)14.73
OCFY4.8%
SpS36.88
BVpS-3.04
TBVpS-7.68
PEG (NY)5.88
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
WACC7.91%
ROIC/WACC2.25
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 5Y9.6%
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 5Y5.51%
EBIT growth 1Y2.6%
EBIT growth 3Y6.28%
EBIT growth 5Y5.78%
EBIT Next Year21.71%
EBIT Next 3Y11.38%
EBIT Next 5Y10.59%
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 for 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.
Can you provide the PE and PB ratios for MCD stock?
The Price/Earnings (PE) ratio for MCDONALD'S CORP (MCD) is 25.76 and the Price/Book (PB) ratio is -100.99.
Can you provide the dividend sustainability for MCD stock?
The dividend rating of MCDONALD'S CORP (MCD) is 7 / 10 and the dividend payout ratio is 60.13%.