MCDONALD'S CORP (MCD) Stock Fundamental Analysis
USA - NYSE:MCD - US5801351017 - Common Stock
304.59 USD
-0.31 (-0.1%)
304.4 USD
-0.19 (-0.06%)
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 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. 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.
In the past 5 years MCD has always been profitable.
Each year in the past 5 years MCD had a positive operating cash flow.
1.2 Ratios
The Return On Assets of MCD (13.88%) is better than 90.91% of its industry peers.
The Return On Invested Capital of MCD (17.77%) is better than 88.64% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MCD is significantly above the industry average of 10.59%.
| 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
Looking at the Profit Margin, with a value of 32.04%, MCD belongs to the top of the industry, outperforming 98.48% of the companies in the same industry.
MCD's Profit Margin has improved in the last couple of years.
MCD has a better Operating Margin (46.12%) 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 71.21% 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), MCD is creating value.
MCD has less shares outstanding than it did 1 year ago.
MCD has less shares outstanding than it did 5 years ago.
MCD has about the same debt/assets ratio as last year.
2.2 Solvency
MCD has an Altman-Z score of 4.77. This indicates that MCD is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of MCD (4.77) is better than 88.64% 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 better Debt to FCF ratio (5.60) than 73.48% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.6 | ||
| Altman-Z | 4.77 |
ROIC/WACC2.26
WACC7.86%
2.3 Liquidity
A Current Ratio of 1.00 indicates that MCD should not have too much problems paying its short term obligations.
MCD has a Current ratio (1.00) which is in line with its industry peers.
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
MCD is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.23% yearly.
The Revenue is expected to grow by 5.06% on average over the next years.
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
The Price/Earnings ratio is 25.57, which means the current valuation is very expensive for MCD.
Compared to the rest of the industry, the Price/Earnings ratio of MCD is on the same level as its industry peers.
MCD is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 25.51, which is the current average of the S&P500 Index.
MCD is valuated rather expensively with a Price/Forward Earnings ratio of 22.70.
MCD's Price/Forward Earnings ratio is in line with the industry average.
MCD is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 34.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.57 | ||
| Fwd PE | 22.7 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MCD is valued a bit more expensive than the industry average as 65.15% of the companies are valued more cheaply.
MCD's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.48 | ||
| EV/EBITDA | 17.93 |
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)4.54
PEG (5Y)3.12
EPS Next 2Y6.96%
EPS Next 3Y7.48%
5. Dividend
5.1 Amount
MCD has a Yearly Dividend Yield of 2.42%.
Compared to an average industry Dividend Yield of 4.58, MCD pays a better dividend. On top of this MCD pays more dividend than 80.30% of the companies listed in the same industry.
MCD's Dividend Yield is comparable with the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.42% |
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%
304.59
-0.31 (-0.1%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners74.98%
Inst Owner Change-1.29%
Ins Owners0.2%
Ins Owner Change-2.83%
Market Cap217.36B
Revenue(TTM)26.27B
Net Income(TTM)8.41B
Analysts72.27
Price Target341.44 (12.1%)
Short Float %1.02%
Short Ratio2.4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.42% |
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)-2.11%
EPS NQ rev (3m)-2.88%
EPS NY rev (1m)-0.66%
EPS NY rev (3m)0.07%
Revenue NQ rev (1m)-0.65%
Revenue NQ rev (3m)-1.08%
Revenue NY rev (1m)-0.14%
Revenue NY rev (3m)1.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.57 | ||
| Fwd PE | 22.7 | ||
| P/S | 8.28 | ||
| P/FCF | 29.48 | ||
| P/OCF | 20.73 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.93 |
EPS(TTM)11.91
EY3.91%
EPS(NY)13.42
Fwd EY4.41%
FCF(TTM)10.33
FCFY3.39%
OCF(TTM)14.7
OCFY4.82%
SpS36.81
BVpS-3.03
TBVpS-7.66
PEG (NY)4.54
PEG (5Y)3.12
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 | 4.77 |
F-Score7
WACC7.86%
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 25.57 and the Price/Book (PB) ratio is -100.49.
How financially healthy is MCDONALD'S CORP?
The financial health rating of MCDONALD'S CORP (MCD) is 5 / 10.