MCDONALD'S CORP (MCD) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MCD - US5801351017 - Common Stock
311.23 USD
+2.69 (+0.87%)
311.23 USD
0 (0%)
Overall MCD gets a fundamental rating of 6 out of 10. We evaluated MCD against 132 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 could make MCD a good candidate 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.
In the past 5 years MCD has always been profitable.
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 13.88%, MCD belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 17.77%, MCD belongs to the top of the industry, outperforming 89.39% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for MCD is significantly above the industry average of 10.42%.
| 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 97.73% 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.
In the last couple of years the Operating Margin of MCD has grown nicely.
MCD has a better Gross Margin (57.43%) than 71.97% 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
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
MCD has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, MCD has about the same debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.82 indicates that MCD is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.82, MCD belongs to the top of the industry, outperforming 87.12% of the companies in the same industry.
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.
MCD's Debt to FCF ratio of 5.60 is fine compared to the rest of the industry. MCD outperforms 74.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.6 | ||
| Altman-Z | 4.82 |
ROIC/WACC2.25
WACC7.89%
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.
With a Current ratio value of 1.00, MCD perfoms like the industry average, outperforming 53.79% 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 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.
MCD shows a small growth in Revenue. In the last year, the Revenue has grown by 1.26%.
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
Based on estimates for the next years, MCD will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.93% on average per year.
Based on estimates for the next years, MCD will show a small growth in Revenue. The Revenue will grow by 5.81% on average per year.
EPS Next Y4.44%
EPS Next 2Y6.77%
EPS Next 3Y7.49%
EPS Next 5Y10.93%
Revenue Next Year2.58%
Revenue Next 2Y4.08%
Revenue Next 3Y4.44%
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.
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 26.13 indicates a quite expensive valuation of MCD.
MCD's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 26.46. MCD is around the same levels.
A Price/Forward Earnings ratio of 23.28 indicates a rather expensive valuation of MCD.
MCD's Price/Forward Earnings is on the same level as the industry average.
MCD's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 36.10.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.13 | ||
| Fwd PE | 23.28 |
4.2 Price Multiples
65.15% of the companies in the same industry are cheaper than MCD, based on the Enterprise Value to EBITDA ratio.
MCD's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.06 | ||
| EV/EBITDA | 18.23 |
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)3.19
EPS Next 2Y6.77%
EPS Next 3Y7.49%
5. Dividend
5.1 Amount
MCD has a Yearly Dividend Yield of 2.41%.
Compared to an average industry Dividend Yield of 6.01, MCD pays a better dividend. On top of this MCD pays more dividend than 83.33% of the companies listed in the same industry.
MCD's Dividend Yield is comparable with the S&P500 average which is at 2.32.
| 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
60.13% of the earnings are spent on dividend by MCD. 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 2Y6.77%
EPS Next 3Y7.49%
311.23
+2.69 (+0.87%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners74.95%
Inst Owner Change-1.18%
Ins Owners0.2%
Ins Owner Change-1.98%
Market Cap221.64B
Revenue(TTM)26.27B
Net Income(TTM)8.41B
Analysts71.63
Price Target342.07 (9.91%)
Short Float %1.09%
Short Ratio2.6
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-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)0.18%
PT rev (3m)-0.81%
EPS NQ rev (1m)-0.37%
EPS NQ rev (3m)-3.14%
EPS NY rev (1m)-1.13%
EPS NY rev (3m)-1.91%
Revenue NQ rev (1m)-0.03%
Revenue NQ rev (3m)-1.11%
Revenue NY rev (1m)-0.23%
Revenue NY rev (3m)-0.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.13 | ||
| Fwd PE | 23.28 | ||
| P/S | 8.44 | ||
| P/FCF | 30.06 | ||
| P/OCF | 21.14 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.23 |
EPS(TTM)11.91
EY3.83%
EPS(NY)13.37
Fwd EY4.3%
FCF(TTM)10.35
FCFY3.33%
OCF(TTM)14.73
OCFY4.73%
SpS36.88
BVpS-3.04
TBVpS-7.68
PEG (NY)5.88
PEG (5Y)3.19
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 | 4.82 |
F-Score7
WACC7.89%
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 Y4.44%
EPS Next 2Y6.77%
EPS Next 3Y7.49%
EPS Next 5Y10.93%
Revenue 1Y (TTM)1.26%
Revenue growth 3Y3.73%
Revenue growth 5Y3.94%
Sales Q2Q%2.98%
Revenue Next Year2.58%
Revenue Next 2Y4.08%
Revenue Next 3Y4.44%
Revenue Next 5Y5.81%
EBIT growth 1Y2.6%
EBIT growth 3Y6.28%
EBIT growth 5Y5.78%
EBIT Next Year21.72%
EBIT Next 3Y11.49%
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 26.13 and the Price/Book (PB) ratio is -102.47.
How financially healthy is MCDONALD'S CORP?
The financial health rating of MCDONALD'S CORP (MCD) is 5 / 10.