MCDONALD'S CORP (MCD) Stock Fundamental Analysis
NYSE:MCD - New York Stock Exchange, Inc. - US5801351017 - Common Stock - Currency: USD
Taking everything into account, MCD scores 6 out of 10 in our fundamental rating. MCD was compared to 135 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 quite expensive at the moment. It does show a decent growth rate. 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.
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
Looking at the Return On Assets, with a value of 14.90%, MCD belongs to the top of the industry, outperforming 93.89% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 18.47%, MCD belongs to the top of the industry, outperforming 90.84% 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 10.79%.
The last Return On Invested Capital (18.47%) for MCD is above the 3 year average (18.38%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.9% | ||
| ROE | N/A | ||
| ROIC | 18.47% |
ROA(3y)14.08%
ROA(5y)13.05%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)18.38%
ROIC(5y)16.68%
1.3 Margins
MCD's Profit Margin of 31.72% is amongst the best of the industry. MCD outperforms 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 45.73%, 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.
MCD has a better Gross Margin (56.75%) than 67.18% of its industry peers.
In the last couple of years the Gross Margin of MCD has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 45.73% | ||
| PM (TTM) | 31.72% | ||
| GM | 56.75% |
OM growth 3Y2.46%
OM growth 5Y1.77%
PM growth 3Y-0.79%
PM growth 5Y2.38%
GM growth 3Y1.57%
GM growth 5Y1.64%
2. Health
2.1 Basic Checks
MCD has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
MCD has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, MCD has less shares outstanding
The debt/assets ratio for MCD has been reduced compared to a year ago.
2.2 Solvency
The Debt to FCF ratio of MCD is 5.76, which is a neutral value as it means it would take MCD, 5.76 years of fcf income to pay off all of its debts.
MCD has a better Debt to FCF ratio (5.76) than 72.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.76 | ||
| Altman-Z | N/A |
ROIC/WACC1.99
WACC9.3%
2.3 Liquidity
A Current Ratio of 1.19 indicates that MCD should not have too much problems paying its short term obligations.
The Current ratio of MCD (1.19) is better than 62.60% of its industry peers.
MCD has a Quick Ratio of 1.19. 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 better Quick ratio (1.19) than 64.12% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.19 | ||
| Quick Ratio | 1.19 |
3. Growth
3.1 Past
The earnings per share for MCD have decreased by -1.76% in the last year.
MCD shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.20% yearly.
Looking at the last year, MCD shows a small growth in Revenue. The Revenue has grown by 1.67% in the last year.
MCD shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.94% yearly.
EPS 1Y (TTM)-1.76%
EPS 3Y8.12%
EPS 5Y8.2%
EPS Q2Q%-4.07%
Revenue 1Y (TTM)1.67%
Revenue growth 3Y3.73%
Revenue growth 5Y3.94%
Sales Q2Q%-0.28%
3.2 Future
MCD is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.11% yearly.
Based on estimates for the next years, MCD will show a small growth in Revenue. The Revenue will grow by 5.94% on average per year.
EPS Next Y6.21%
EPS Next 2Y7.18%
EPS Next 3Y8.01%
EPS Next 5Y10.11%
Revenue Next Year1.93%
Revenue Next 2Y3.61%
Revenue Next 3Y4.55%
Revenue Next 5Y5.94%
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 accelerating.
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
With a Price/Earnings ratio of 25.99, MCD can be considered very expensive at the moment.
Based on the Price/Earnings ratio, MCD is valued a bit cheaper than 61.83% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 29.63. MCD is around the same levels.
The Price/Forward Earnings ratio is 24.47, which indicates a rather expensive current valuation of MCD.
The rest of the industry has a similar Price/Forward Earnings ratio as MCD.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.68, MCD is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.99 | ||
| Fwd PE | 24.47 |
4.2 Price Multiples
Based on the Price/Free Cash Flow ratio, MCD is valued a bit cheaper than the industry average as 64.89% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.73 | ||
| EV/EBITDA | N/A |
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)4.19
PEG (5Y)3.17
EPS Next 2Y7.18%
EPS Next 3Y8.01%
5. Dividend
5.1 Amount
MCD has a Yearly Dividend Yield of 2.29%. Purely for dividend investing, there may be better candidates out there.
MCD's Dividend Yield is rather good when compared to the industry average which is at 3.06. MCD pays more dividend than 83.21% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, MCD has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.29% |
5.2 History
The dividend of MCD is nicely growing with an annual growth rate of 7.40%!
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)7.4%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
MCD pays out 59.22% of its income as dividend. 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.
DP59.22%
EPS Next 2Y7.18%
EPS Next 3Y8.01%
304.81
+1.76 (+0.58%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners72.06%
Inst Owner Change1.89%
Ins Owners0.16%
Ins Owner Change-5.82%
Market Cap218.43B
Analysts77.27
Price Target337.5 (10.72%)
Short Float %1.11%
Short Ratio2.54
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.29% |
Yearly Dividend6.77
Dividend Growth(5Y)7.4%
DP59.22%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.64%
Min EPS beat(2)-1.13%
Max EPS beat(2)-0.14%
EPS beat(4)0
Avg EPS beat(4)-1.78%
Min EPS beat(4)-4.24%
Max EPS beat(4)-0.14%
EPS beat(8)4
Avg EPS beat(8)3.23%
EPS beat(12)8
Avg EPS beat(12)3.3%
EPS beat(16)11
Avg EPS beat(16)3.84%
Revenue beat(2)0
Avg Revenue beat(2)-1.02%
Min Revenue beat(2)-1.83%
Max Revenue beat(2)-0.22%
Revenue beat(4)0
Avg Revenue beat(4)-1.39%
Min Revenue beat(4)-2.76%
Max Revenue beat(4)-0.22%
Revenue beat(8)3
Avg Revenue beat(8)0.08%
Revenue beat(12)6
Avg Revenue beat(12)0.34%
Revenue beat(16)9
Avg Revenue beat(16)0.59%
PT rev (1m)-0.21%
PT rev (3m)2.45%
EPS NQ rev (1m)-3.33%
EPS NQ rev (3m)-6.71%
EPS NY rev (1m)-2.09%
EPS NY rev (3m)-2.22%
Revenue NQ rev (1m)-2.19%
Revenue NQ rev (3m)-5.29%
Revenue NY rev (1m)-1.11%
Revenue NY rev (3m)-1.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.99 | ||
| Fwd PE | 24.47 | ||
| P/S | 8.43 | ||
| P/FCF | 32.73 | ||
| P/OCF | 23.12 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | N/A |
EPS(TTM)11.73
EY3.85%
EPS(NY)12.46
Fwd EY4.09%
FCF(TTM)9.31
FCFY3.05%
OCF(TTM)13.18
OCFY4.33%
SpS36.17
BVpS-5.3
TBVpS-5.3
PEG (NY)4.19
PEG (5Y)3.17
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.9% | ||
| ROE | N/A | ||
| ROCE | 23.1% | ||
| ROIC | 18.47% | ||
| ROICexc | 18.87% | ||
| ROICexgc | 18.87% | ||
| OM | 45.73% | ||
| PM (TTM) | 31.72% | ||
| GM | 56.75% | ||
| FCFM | 25.74% |
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)20.74%
ROICexgc(5y)19.16%
ROCE(3y)23.04%
ROCE(5y)20.89%
ROICexcg growth 3Y-0.24%
ROICexcg growth 5Y1.22%
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 3Y1.57%
GM growth 5Y1.64%
F-Score6
Asset Turnover0.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.76 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | 10.71% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | N/A | ||
| Profit Quality | 81.15% | ||
| Current Ratio | 1.19 | ||
| Quick Ratio | 1.19 | ||
| Altman-Z | N/A |
F-Score6
WACC9.3%
ROIC/WACC1.99
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
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)-1.76%
EPS 3Y8.12%
EPS 5Y8.2%
EPS Q2Q%-4.07%
EPS Next Y6.21%
EPS Next 2Y7.18%
EPS Next 3Y8.01%
EPS Next 5Y10.11%
Revenue 1Y (TTM)1.67%
Revenue growth 3Y3.73%
Revenue growth 5Y3.94%
Sales Q2Q%-0.28%
Revenue Next Year1.93%
Revenue Next 2Y3.61%
Revenue Next 3Y4.55%
Revenue Next 5Y5.94%
EBIT growth 1Y0.92%
EBIT growth 3Y6.28%
EBIT growth 5Y5.78%
EBIT Next Year22.1%
EBIT Next 3Y11.81%
EBIT Next 5Y9.87%
FCF growth 1Y-8.02%
FCF growth 3Y-2.05%
FCF growth 5Y3.1%
OCF growth 1Y-1.71%
OCF growth 3Y1.11%
OCF growth 5Y3.07%