MCKESSON CORP (MCK)
US58155Q1031 - Common Stock
We assign a fundamental rating of 6 out of 10 to MCK. 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 has a decent growth rate and is not valued too expensively.
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.
In the past 5 years MCK always reported a positive cash flow from operatings.
1.2 Ratios
MCK's Return On Assets of 3.50% is fine compared to the rest of the industry. MCK outperforms 74.34% of its industry peers.
Looking at the Return On Invested Capital, with a value of 22.80%, MCK belongs to the top of the industry, outperforming 98.23% 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 8.10%.
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
With a decent Profit Margin value of 0.77%, MCK is doing good in the industry, outperforming 62.83% of the companies in the same industry.
In the last couple of years the Profit Margin of MCK has grown nicely.
MCK has a Operating Margin (1.15%) which is in line with its industry peers.
In the last couple of years the Operating Margin of MCK has declined.
Looking at the Gross Margin, with a value of 3.94%, MCK is doing worse than 81.42% of the companies in the same industry.
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.
Compared to 1 year ago, MCK has less shares outstanding
MCK has less shares outstanding than it did 5 years ago.
The debt/assets ratio for MCK has been reduced compared to a year ago.
2.2 Solvency
MCK has an Altman-Z score of 5.58. This indicates that MCK is financially healthy and has little risk of bankruptcy at the moment.
MCK has a better Altman-Z score (5.58) than 89.38% 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.
The Debt to FCF ratio of MCK (1.34) is better than 90.27% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 1.34 | ||
| Altman-Z | 5.58 |
ROIC/WACC2.63
WACC8.68%
2.3 Liquidity
MCK has a Current 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.
MCK has a worse Current ratio (0.91) than 78.76% of its industry peers.
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.
MCK has a Quick ratio of 0.50. This is amonst the worse of the industry: MCK underperforms 87.61% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.5 |
3. Growth
3.1 Past
MCK shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.64%.
MCK shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.07% yearly.
Looking at the last year, MCK shows a quite strong growth in Revenue. The Revenue has grown by 13.43% in the last year.
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
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.
MCK is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.48% yearly.
EPS Next Y19.45%
EPS Next 2Y15.55%
EPS Next 3Y14.36%
EPS Next 5Y15.16%
Revenue Next Year14.81%
Revenue Next 2Y11.68%
Revenue Next 3Y10.07%
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
A Price/Earnings ratio of 21.76 indicates a rather expensive valuation of MCK.
Based on the Price/Earnings ratio, MCK is valued a bit cheaper than 70.80% of the companies in the same industry.
MCK is valuated rather cheaply when we compare the Price/Earnings ratio to 28.96, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 17.16, MCK is valued on the expensive side.
Based on the Price/Forward Earnings ratio, MCK is valued a bit cheaper than the industry average as 73.45% of the companies are valued more expensively.
MCK is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.82, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.76 | ||
| Fwd PE | 17.16 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MCK is on the same level as its industry peers.
MCK's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. MCK is cheaper than 79.65% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.55 | ||
| EV/EBITDA | 18.44 |
4.3 Compensation for Growth
MCK's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of MCK may justify a higher PE ratio.
MCK's earnings are expected to grow with 14.36% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.12
PEG (5Y)1.44
EPS Next 2Y15.55%
EPS Next 3Y14.36%
5. Dividend
5.1 Amount
MCK has a yearly dividend return of 0.47%, which is pretty low.
Compared to an average industry Dividend Yield of 3.16, MCK pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.23, MCK's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.47% |
5.2 History
The dividend of MCK is nicely growing with an annual growth rate of 9.65%!
MCK has been paying a dividend for at least 10 years, so it has a reliable track record.
MCK has decreased its dividend recently.
Dividend Growth(5Y)9.65%
Div Incr Years1
Div Non Decr Years1
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 2Y15.55%
EPS Next 3Y14.36%
MCKESSON CORP
NYSE:MCK (11/21/2024, 8:04:00 PM)
After market: 628.27 0 (0%)628.27
+7.13 (+1.15%)
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 Cap79.75B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.47% |
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 | 21.76 | ||
| Fwd PE | 17.16 | ||
| 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)1.12
PEG (5Y)1.44
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.5% | ||
| ROE | N/A | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 1.15% | ||
| PM (TTM) | 0.77% | ||
| GM | 3.94% | ||
| 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 Turnover4.56
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 | 0.91 | ||
| Quick Ratio | 0.5 | ||
| 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)4.64%
EPS 3Y16.77%
EPS 5Y
EPS Q2Q%
EPS Next Y19.45%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)13.43%
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