MCCORMICK & CO-NON VTG SHRS (MKC)
US5797802064 - Common Stock
We assign a fundamental rating of 4 out of 10 to MKC. MKC was compared to 90 industry peers in the Food Products industry. While MKC belongs to the best of the industry regarding profitability, there are concerns on its financial health. MKC is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year MKC was profitable.
In the past year MKC had a positive cash flow from operations.
MKC had positive earnings in each of the past 5 years.
In the past 5 years MKC always reported a positive cash flow from operatings.
1.2 Ratios
MKC has a Return On Assets of 6.00%. This is in the better half of the industry: MKC outperforms 70.24% of its industry peers.
MKC has a Return On Equity of 14.62%. This is in the better half of the industry: MKC outperforms 76.19% of its industry peers.
The Return On Invested Capital of MKC (7.51%) is better than 73.81% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MKC is in line with the industry average of 8.82%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6% | ||
| ROE | 14.62% | ||
| ROIC | 7.51% |
ROA(3y)5.45%
ROA(5y)5.86%
ROE(3y)15.05%
ROE(5y)16.92%
ROIC(3y)7.71%
ROIC(5y)7.99%
1.3 Margins
MKC has a Profit Margin of 11.87%. This is amongst the best in the industry. MKC outperforms 88.10% of its industry peers.
MKC's Profit Margin has declined in the last couple of years.
MKC has a better Operating Margin (16.07%) than 85.71% of its industry peers.
MKC's Operating Margin has declined in the last couple of years.
With an excellent Gross Margin value of 38.48%, MKC belongs to the best of the industry, outperforming 86.90% of the companies in the same industry.
In the last couple of years the Gross Margin of MKC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.07% | ||
| PM (TTM) | 11.87% | ||
| GM | 38.48% |
OM growth 3Y-5.45%
OM growth 5Y-2.6%
PM growth 3Y-8.52%
PM growth 5Y-10.31%
GM growth 3Y-2.93%
GM growth 5Y-0.99%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), MKC is destroying value.
The number of shares outstanding for MKC remains at a similar level compared to 1 year ago.
MKC has more shares outstanding than it did 5 years ago.
MKC has a better debt/assets ratio than last year.
2.2 Solvency
MKC has an Altman-Z score of 2.65. This is not the best score and indicates that MKC is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.65, MKC is in line with its industry, outperforming 52.38% of the companies in the same industry.
The Debt to FCF ratio of MKC is 5.92, which is a neutral value as it means it would take MKC, 5.92 years of fcf income to pay off all of its debts.
MKC has a Debt to FCF ratio (5.92) which is in line with its industry peers.
MKC has a Debt/Equity ratio of 0.83. This is a neutral value indicating MKC is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.83, MKC is doing worse than 71.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.83 | ||
| Debt/FCF | 5.92 | ||
| Altman-Z | 2.65 |
ROIC/WACC0.93
WACC8.11%
2.3 Liquidity
MKC has a Current Ratio of 0.71. This is a bad value and indicates that MKC is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.71, MKC is not doing good in the industry: 85.71% of the companies in the same industry are doing better.
A Quick Ratio of 0.32 indicates that MKC may have some problems paying its short term obligations.
With a Quick ratio value of 0.32, MKC is not doing good in the industry: 91.67% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.32 |
3. Growth
3.1 Past
MKC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 16.73%, which is quite good.
Measured over the past 5 years, MKC shows a small growth in Earnings Per Share. The EPS has been growing by 1.60% on average per year.
MKC shows a small growth in Revenue. In the last year, the Revenue has grown by 1.11%.
MKC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.67% yearly.
EPS 1Y (TTM)16.73%
EPS 3Y-1.68%
EPS 5Y1.6%
EPS Q2Q%27.69%
Revenue 1Y (TTM)1.11%
Revenue growth 3Y5.95%
Revenue growth 5Y4.67%
Sales Q2Q%-0.29%
3.2 Future
The Earnings Per Share is expected to grow by 7.58% on average over the next years.
The Revenue is expected to grow by 2.69% on average over the next years.
EPS Next Y9.7%
EPS Next 2Y8.24%
EPS Next 3Y8.02%
EPS Next 5Y7.58%
Revenue Next Year-0.12%
Revenue Next 2Y1.31%
Revenue Next 3Y1.95%
Revenue Next 5Y2.69%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 25.61, MKC can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of MKC is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 27.17, MKC is valued at the same level.
Based on the Price/Forward Earnings ratio of 24.38, the valuation of MKC can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MKC is on the same level as its industry peers.
MKC is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 23.59, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.61 | ||
| Fwd PE | 24.38 |
4.2 Price Multiples
MKC's Enterprise Value to EBITDA is on the same level as the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MKC is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.62 | ||
| EV/EBITDA | 18.49 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MKC does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of MKC may justify a higher PE ratio.
PEG (NY)2.64
PEG (5Y)16.03
EPS Next 2Y8.24%
EPS Next 3Y8.02%
5. Dividend
5.1 Amount
MKC has a Yearly Dividend Yield of 2.31%. Purely for dividend investing, there may be better candidates out there.
MKC's Dividend Yield is a higher than the industry average which is at 3.83.
MKC's Dividend Yield is comparable with the S&P500 average which is at 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.31% |
5.2 History
On average, the dividend of MKC grows each year by 8.48%, which is quite nice.
MKC has paid a dividend for at least 10 years, which is a reliable track record.
MKC has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)8.48%
Div Incr Years33
Div Non Decr Years33
5.3 Sustainability
55.89% of the earnings are spent on dividend by MKC. This is a bit on the high side, but may be sustainable.
MKC's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP55.89%
EPS Next 2Y8.24%
EPS Next 3Y8.02%
MCCORMICK & CO-NON VTG SHRS
NYSE:MKC (1/2/2025, 10:09:06 AM)
76.83
+0.59 (+0.77%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners88.17%
Inst Owner Change0.3%
Ins Owners0.01%
Ins Owner Change-0.3%
Market Cap20.62B
Analysts70.48
Price Target87.82 (14.3%)
Short Float %2.12%
Short Ratio3.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.31% |
Dividend Growth(5Y)8.48%
DP55.89%
Div Incr Years33
Div Non Decr Years33
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)18.87%
Min EPS beat(2)16.45%
Max EPS beat(2)21.3%
EPS beat(4)4
Avg EPS beat(4)12.96%
Min EPS beat(4)6.19%
Max EPS beat(4)21.3%
EPS beat(8)6
Avg EPS beat(8)6.53%
EPS beat(12)8
Avg EPS beat(12)1.69%
EPS beat(16)11
Avg EPS beat(16)3.75%
Revenue beat(2)0
Avg Revenue beat(2)-0.27%
Min Revenue beat(2)-0.29%
Max Revenue beat(2)-0.25%
Revenue beat(4)1
Avg Revenue beat(4)-0.46%
Min Revenue beat(4)-3.27%
Max Revenue beat(4)1.95%
Revenue beat(8)2
Avg Revenue beat(8)-1.17%
Revenue beat(12)3
Avg Revenue beat(12)-1.14%
Revenue beat(16)5
Avg Revenue beat(16)-0.22%
PT rev (1m)0.16%
PT rev (3m)5.76%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-16.32%
EPS NY rev (1m)-0.07%
EPS NY rev (3m)2.05%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.22%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.36%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.61 | ||
| Fwd PE | 24.38 | ||
| P/S | 3.09 | ||
| P/FCF | 26.62 | ||
| P/OCF | 19.82 | ||
| P/B | 3.8 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.49 |
EPS(TTM)3
EY3.9%
EPS(NY)3.15
Fwd EY4.1%
FCF(TTM)2.89
FCFY3.76%
OCF(TTM)3.88
OCFY5.05%
SpS24.89
BVpS20.2
TBVpS-11.88
PEG (NY)2.64
PEG (5Y)16.03
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6% | ||
| ROE | 14.62% | ||
| ROCE | 10.67% | ||
| ROIC | 7.51% | ||
| ROICexc | 7.65% | ||
| ROICexgc | 34.76% | ||
| OM | 16.07% | ||
| PM (TTM) | 11.87% | ||
| GM | 38.48% | ||
| FCFM | 11.6% |
ROA(3y)5.45%
ROA(5y)5.86%
ROE(3y)15.05%
ROE(5y)16.92%
ROIC(3y)7.71%
ROIC(5y)7.99%
ROICexc(3y)7.92%
ROICexc(5y)8.22%
ROICexgc(3y)68.5%
ROICexgc(5y)67.43%
ROCE(3y)10.44%
ROCE(5y)10.9%
ROICexcg growth 3Y2.35%
ROICexcg growth 5Y5.82%
ROICexc growth 3Y-1.07%
ROICexc growth 5Y-0.55%
OM growth 3Y-5.45%
OM growth 5Y-2.6%
PM growth 3Y-8.52%
PM growth 5Y-10.31%
GM growth 3Y-2.93%
GM growth 5Y-0.99%
F-Score8
Asset Turnover0.51
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.83 | ||
| Debt/FCF | 5.92 | ||
| Debt/EBITDA | 3.54 | ||
| Cap/Depr | 128.88% | ||
| Cap/Sales | 3.98% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 81.3% | ||
| Profit Quality | 97.7% | ||
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.32 | ||
| Altman-Z | 2.65 |
F-Score8
WACC8.11%
ROIC/WACC0.93
Cap/Depr(3y)137.41%
Cap/Depr(5y)131.63%
Cap/Sales(3y)4.16%
Cap/Sales(5y)3.95%
Profit Quality(3y)91%
Profit Quality(5y)98.44%
High Growth Momentum
Growth
EPS 1Y (TTM)16.73%
EPS 3Y-1.68%
EPS 5Y1.6%
EPS Q2Q%27.69%
EPS Next Y9.7%
EPS Next 2Y8.24%
EPS Next 3Y8.02%
EPS Next 5Y7.58%
Revenue 1Y (TTM)1.11%
Revenue growth 3Y5.95%
Revenue growth 5Y4.67%
Sales Q2Q%-0.29%
Revenue Next Year-0.12%
Revenue Next 2Y1.31%
Revenue Next 3Y1.95%
Revenue Next 5Y2.69%
EBIT growth 1Y8.33%
EBIT growth 3Y0.18%
EBIT growth 5Y1.95%
EBIT Next Year27.96%
EBIT Next 3Y9.79%
EBIT Next 5Y9.12%
FCF growth 1Y71.86%
FCF growth 3Y6.06%
FCF growth 5Y8.34%
OCF growth 1Y47.47%
OCF growth 3Y5.92%
OCF growth 5Y8.54%