MCKESSON CORP (MCK)
US58155Q1031 - Common Stock
MCK gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 109 industry peers in the Health Care Providers & Services industry. MCK has an average financial health and profitability rating. MCK has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
MCK had positive earnings in the past year.
MCK had a positive operating cash flow in the past year.
MCK had positive earnings in 4 of the past 5 years.
MCK had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 3.50%, MCK is doing good in the industry, outperforming 73.15% of the companies in the same industry.
With an excellent Return On Invested Capital value of 22.80%, MCK belongs to the best of the industry, outperforming 98.15% of the companies in the same industry.
MCK had an Average Return On Invested Capital over the past 3 years of 21.89%. This is significantly above the industry average of 8.15%.
The last Return On Invested Capital (22.80%) for MCK is above the 3 year average (21.89%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.5% | ||
| ROE | N/A | ||
| ROIC | 22.8% |
ROA(3y)3.97%
ROA(5y)1.28%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)21.89%
ROIC(5y)18.52%
1.3 Margins
The Profit Margin of MCK (0.77%) is comparable to the rest of the industry.
In the last couple of years the Profit Margin of MCK has grown nicely.
The Operating Margin of MCK (1.15%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of MCK has declined.
MCK has a worse Gross Margin (3.94%) than 81.48% of its industry peers.
In the last couple of years the Gross Margin of MCK has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.15% | ||
| PM (TTM) | 0.77% | ||
| GM | 3.94% |
OM growth 3Y-6.32%
OM growth 5Y-3.65%
PM growth 3YN/A
PM growth 5Y127.73%
GM growth 3Y-7.56%
GM growth 5Y-5.78%
2. Health
2.1 Basic Checks
MCK has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
MCK has less shares outstanding than it did 1 year ago.
MCK has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, MCK has an improved debt to assets ratio.
2.2 Solvency
MCK has an Altman-Z score of 5.54. This indicates that MCK is financially healthy and has little risk of bankruptcy at the moment.
MCK has a Altman-Z score of 5.54. This is amongst the best in the industry. MCK outperforms 87.96% of its industry peers.
MCK has a debt to FCF ratio of 1.34. This is a very positive value and a sign of high solvency as it would only need 1.34 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.34, MCK belongs to the top of the industry, outperforming 88.89% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 1.34 | ||
| Altman-Z | 5.54 |
ROIC/WACC2.59
WACC8.8%
2.3 Liquidity
A Current Ratio of 0.91 indicates that MCK may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.91, MCK is doing worse than 78.70% of the companies in the same industry.
MCK has a Quick Ratio of 0.91. This is a bad value and indicates that MCK is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of MCK (0.50) is worse than 89.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.5 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 4.64% over the past year.
MCK shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.07% yearly.
The Revenue has grown by 13.43% in the past year. This is quite good.
MCK shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.59% yearly.
EPS 1Y (TTM)4.64%
EPS 3Y16.77%
EPS 5Y15.07%
EPS Q2Q%13.48%
Revenue 1Y (TTM)13.43%
Revenue growth 3Y9.05%
Revenue growth 5Y7.59%
Sales Q2Q%21.29%
3.2 Future
MCK is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 15.08% yearly.
MCK is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.44% yearly.
EPS Next Y20.46%
EPS Next 2Y16.31%
EPS Next 3Y14.58%
EPS Next 5Y15.08%
Revenue Next Year15.41%
Revenue Next 2Y12.42%
Revenue Next 3Y10.58%
Revenue Next 5Y8.44%
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 stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 20.08, which indicates a rather expensive current valuation of MCK.
Based on the Price/Earnings ratio, MCK is valued a bit cheaper than the industry average as 69.44% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.73. MCK is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 15.63, which indicates a correct valuation of MCK.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MCK indicates a somewhat cheap valuation: MCK is cheaper than 72.22% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.83, MCK is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.08 | ||
| Fwd PE | 15.63 |
4.2 Price Multiples
MCK's Enterprise Value to EBITDA ratio is in line with the industry average.
77.78% of the companies in the same industry are more expensive than MCK, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.12 | ||
| EV/EBITDA | 17.26 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
MCK has a very decent profitability rating, which may justify a higher PE ratio.
MCK's earnings are expected to grow with 14.58% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.98
PEG (5Y)1.33
EPS Next 2Y16.31%
EPS Next 3Y14.58%
5. Dividend
5.1 Amount
With a yearly dividend of 0.49%, MCK is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.17, MCK pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.34, MCK's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.49% |
5.2 History
On average, the dividend of MCK grows each year by 9.65%, which is quite nice.
MCK has paid a dividend for at least 10 years, which is a reliable track record.
MCK has decreased its dividend in the last 3 years.
Dividend Growth(5Y)9.65%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
12.89% of the earnings are spent on dividend by MCK. This is a low number and sustainable payout ratio.
MCK's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP12.89%
EPS Next 2Y16.31%
EPS Next 3Y14.58%
MCKESSON CORP
NYSE:MCK (12/20/2024, 8:23:44 PM)
After market: 579.74 0 (0%)579.74
+0.52 (+0.09%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners88.45%
Inst Owner Change0.38%
Ins Owners0.08%
Ins Owner Change-4.55%
Market Cap73.59B
Analysts82.73
Price Target659.14 (13.7%)
Short Float %1.51%
Short Ratio2.24
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.49% |
Dividend Growth(5Y)9.65%
DP12.89%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.01%
Min EPS beat(2)1.77%
Max EPS beat(2)8.24%
EPS beat(4)3
Avg EPS beat(4)3.8%
Min EPS beat(4)-3.56%
Max EPS beat(4)8.73%
EPS beat(8)6
Avg EPS beat(8)5.62%
EPS beat(12)8
Avg EPS beat(12)5.06%
EPS beat(16)11
Avg EPS beat(16)8.36%
Revenue beat(2)1
Avg Revenue beat(2)-0.54%
Min Revenue beat(2)-4.89%
Max Revenue beat(2)3.8%
Revenue beat(4)2
Avg Revenue beat(4)-0.73%
Min Revenue beat(4)-4.89%
Max Revenue beat(4)3.8%
Revenue beat(8)5
Avg Revenue beat(8)0.14%
Revenue beat(12)8
Avg Revenue beat(12)0.6%
Revenue beat(16)11
Avg Revenue beat(16)0.7%
PT rev (1m)10.74%
PT rev (3m)2.74%
EPS NQ rev (1m)0%
EPS NQ rev (3m)3.92%
EPS NY rev (1m)0.85%
EPS NY rev (3m)1.55%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.3%
Revenue NY rev (1m)0.52%
Revenue NY rev (3m)2.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.08 | ||
| Fwd PE | 15.63 | ||
| P/S | 0.22 | ||
| P/FCF | 17.12 | ||
| P/OCF | 14.41 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.26 |
EPS(TTM)28.87
EY4.98%
EPS(NY)37.09
Fwd EY6.4%
FCF(TTM)33.87
FCFY5.84%
OCF(TTM)40.23
OCFY6.94%
SpS2601.13
BVpS-23.77
TBVpS-115.62
PEG (NY)0.98
PEG (5Y)1.33
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.5% | ||
| ROE | N/A | ||
| ROCE | 27.83% | ||
| ROIC | 22.8% | ||
| ROICexc | 27.93% | ||
| ROICexgc | N/A | ||
| OM | 1.15% | ||
| PM (TTM) | 0.77% | ||
| GM | 3.94% | ||
| FCFM | 1.3% |
ROA(3y)3.97%
ROA(5y)1.28%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)21.89%
ROIC(5y)18.52%
ROICexc(3y)31.11%
ROICexc(5y)25.97%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)26.72%
ROCE(5y)22.6%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y14.1%
ROICexc growth 5Y16.79%
OM growth 3Y-6.32%
OM growth 5Y-3.65%
PM growth 3YN/A
PM growth 5Y127.73%
GM growth 3Y-7.56%
GM growth 5Y-5.78%
F-Score6
Asset Turnover4.56
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 1.34 | ||
| Debt/EBITDA | 1.28 | ||
| Cap/Depr | 124.12% | ||
| Cap/Sales | 0.24% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 114.71% | ||
| Profit Quality | 169.52% | ||
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.5 | ||
| Altman-Z | 5.54 |
F-Score6
WACC8.8%
ROIC/WACC2.59
Cap/Depr(3y)90.12%
Cap/Depr(5y)79.5%
Cap/Sales(3y)0.21%
Cap/Sales(5y)0.22%
Profit Quality(3y)188.26%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)4.64%
EPS 3Y16.77%
EPS 5Y15.07%
EPS Q2Q%13.48%
EPS Next Y20.46%
EPS Next 2Y16.31%
EPS Next 3Y14.58%
EPS Next 5Y15.08%
Revenue 1Y (TTM)13.43%
Revenue growth 3Y9.05%
Revenue growth 5Y7.59%
Sales Q2Q%21.29%
Revenue Next Year15.41%
Revenue Next 2Y12.42%
Revenue Next 3Y10.58%
Revenue Next 5Y8.44%
EBIT growth 1Y-11.23%
EBIT growth 3Y2.16%
EBIT growth 5Y3.67%
EBIT Next Year22.23%
EBIT Next 3Y12.36%
EBIT Next 5Y11.15%
FCF growth 1Y10.74%
FCF growth 3Y-2.4%
FCF growth 5Y0.84%
OCF growth 1Y17.13%
OCF growth 3Y-1.7%
OCF growth 5Y1.34%