MCKESSON CORP (MCK)
US58155Q1031 - Common Stock
Taking everything into account, MCK scores 5 out of 10 in our fundamental rating. MCK was compared to 113 industry peers in the Health Care Providers & Services industry. MCK has only an average score on both its financial health and profitability. MCK is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
MCK had positive earnings in the past year.
In the past year MCK had a positive cash flow from operations.
MCK had positive earnings in 4 of the past 5 years.
Each year in the past 5 years MCK had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 4.13%, MCK is in the better half of the industry, outperforming 77.39% of the companies in the same industry.
MCK has a better Return On Invested Capital (21.69%) than 97.39% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MCK is significantly above the industry average of 8.02%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.13% | ||
| ROE | N/A | ||
| ROIC | 21.69% |
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
With a decent Profit Margin value of 0.94%, MCK is doing good in the industry, outperforming 63.48% of the companies in the same industry.
MCK's Profit Margin has improved in the last couple of years.
The Operating Margin of MCK (1.29%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of MCK has declined.
Looking at the Gross Margin, with a value of 4.09%, MCK is doing worse than 81.74% of the companies in the same industry.
MCK's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.29% | ||
| PM (TTM) | 0.94% | ||
| GM | 4.09% |
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), MCK 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.
MCK has a better debt/assets ratio than last year.
2.2 Solvency
MCK has an Altman-Z score of 5.36. This indicates that MCK is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.36, MCK belongs to the top of the industry, outperforming 89.57% of the companies in the same industry.
The Debt to FCF ratio of MCK is 1.73, which is an excellent value as it means it would take MCK, only 1.73 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of MCK (1.73) is better than 86.09% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 1.73 | ||
| Altman-Z | 5.36 |
ROIC/WACC2.52
WACC8.59%
2.3 Liquidity
MCK has a Current Ratio of 0.93. This is a bad value and indicates that MCK is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.93, MCK is not doing good in the industry: 75.65% of the companies in the same industry are doing better.
A Quick Ratio of 0.47 indicates that MCK may have some problems paying its short term obligations.
MCK's Quick ratio of 0.47 is on the low side compared to the rest of the industry. MCK is outperformed by 87.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.93 | ||
| Quick Ratio | 0.47 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 2.22% 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.
MCK shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.46%.
Measured over the past years, MCK shows a small growth in Revenue. The Revenue has been growing by 7.59% on average per year.
EPS 1Y (TTM)2.22%
EPS 3Y16.77%
EPS 5Y15.07%
EPS Q2Q%8.39%
Revenue 1Y (TTM)10.46%
Revenue growth 3Y9.05%
Revenue growth 5Y7.59%
Sales Q2Q%6.44%
3.2 Future
Based on estimates for the next years, MCK will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.16% on average per year.
The Revenue is expected to grow by 9.48% on average over the next years. This is quite good.
EPS Next Y17.84%
EPS Next 2Y14.56%
EPS Next 3Y14%
EPS Next 5Y15.16%
Revenue Next Year12.8%
Revenue Next 2Y10.69%
Revenue Next 3Y9.55%
Revenue Next 5Y9.48%
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.
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 18.78, which indicates a rather expensive current valuation of MCK.
MCK's Price/Earnings ratio is a bit cheaper when compared to the industry. MCK is cheaper than 73.91% of the companies in the same industry.
When comparing the Price/Earnings ratio of MCK to the average of the S&P500 Index (30.16), we can say MCK is valued slightly cheaper.
MCK is valuated correctly with a Price/Forward Earnings ratio of 14.63.
MCK's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. MCK is cheaper than 79.13% of the companies in the same industry.
MCK's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 23.23.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.78 | ||
| Fwd PE | 14.63 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as MCK.
Based on the Price/Free Cash Flow ratio, MCK is valued a bit cheaper than 75.65% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.96 | ||
| EV/EBITDA | 15.3 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as MCK's earnings are expected to grow with 14.00% in the coming years.
PEG (NY)1.05
PEG (5Y)1.25
EPS Next 2Y14.56%
EPS Next 3Y14%
5. Dividend
5.1 Amount
With a yearly dividend of 0.57%, MCK is not a good candidate for dividend investing.
MCK's Dividend Yield is a higher than the industry average which is at 3.10.
Compared to an average S&P500 Dividend Yield of 2.25, MCK's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.57% |
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.
The dividend of MCK decreased recently.
Dividend Growth(5Y)9.65%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
MCK pays out 10.88% of its income as dividend. This is a sustainable payout ratio.
The dividend of MCK is growing, but earnings are growing more, so the dividend growth is sustainable.
DP10.88%
EPS Next 2Y14.56%
EPS Next 3Y14%
MCKESSON CORP
NYSE:MCK (11/1/2024, 8:15:16 PM)
After market: 527.67 +1.33 (+0.25%)526.34
+25.75 (+5.14%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap68.26B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.57% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
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Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.78 | ||
| Fwd PE | 14.63 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.05
PEG (5Y)1.25
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.13% | ||
| ROE | N/A | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 1.29% | ||
| PM (TTM) | 0.94% | ||
| GM | 4.09% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover4.38
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.93 | ||
| Quick Ratio | 0.47 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)2.22%
EPS 3Y16.77%
EPS 5Y
EPS Q2Q%
EPS Next Y17.84%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)10.46%
Revenue growth 3Y9.05%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y