MCCORMICK & CO-NON VTG SHRS (MKC) Stock Fundamental Analysis
NYSE:MKC - New York Stock Exchange, Inc. - US5797802064 - Common Stock - Currency: USD
Taking everything into account, MKC scores 4 out of 10 in our fundamental rating. MKC was compared to 91 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 quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
MKC had positive earnings in the past year.
MKC had a positive operating cash flow in the past year.
MKC had positive earnings in each of the past 5 years.
MKC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
MKC has a better Return On Assets (6.03%) than 69.41% of its industry peers.
MKC has a better Return On Equity (14.90%) than 76.47% of its industry peers.
MKC's Return On Invested Capital of 7.90% is fine compared to the rest of the industry. MKC outperforms 75.29% of its industry peers.
MKC had an Average Return On Invested Capital over the past 3 years of 7.52%. This is in line with the industry average of 8.87%.
The 3 year average ROIC (7.52%) for MKC is below the current ROIC(7.90%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.03% | ||
| ROE | 14.9% | ||
| ROIC | 7.9% |
ROA(3y)5.51%
ROA(5y)5.71%
ROE(3y)14.31%
ROE(5y)15.82%
ROIC(3y)7.52%
ROIC(5y)7.83%
1.3 Margins
MKC's Profit Margin of 11.73% is amongst the best of the industry. MKC outperforms 88.24% of its industry peers.
MKC's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 15.91%, MKC belongs to the top of the industry, outperforming 87.06% of the companies in the same industry.
MKC's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 38.54%, MKC belongs to the top of the industry, outperforming 85.88% of the companies in the same industry.
MKC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.91% | ||
| PM (TTM) | 11.73% | ||
| GM | 38.54% |
OM growth 3Y-3%
OM growth 5Y-2.76%
PM growth 3Y-0.64%
PM growth 5Y-2.25%
GM growth 3Y-0.95%
GM growth 5Y-0.8%
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.
The number of shares outstanding for MKC has been increased compared to 5 years ago.
Compared to 1 year ago, MKC has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.85 indicates that MKC is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.85, MKC is doing good in the industry, outperforming 68.24% of the companies in the same industry.
MKC has a debt to FCF ratio of 6.71. This is a slightly negative value and a sign of low solvency as MKC would need 6.71 years to pay back of all of its debts.
MKC has a Debt to FCF ratio (6.71) which is comparable to the rest of the industry.
A Debt/Equity ratio of 0.77 indicates that MKC is somewhat dependend on debt financing.
MKC has a Debt to Equity ratio of 0.77. This is in the lower half of the industry: MKC underperforms 68.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 6.71 | ||
| Altman-Z | 2.85 |
ROIC/WACC0.98
WACC8.1%
2.3 Liquidity
MKC has a Current Ratio of 0.74. This is a bad value and indicates that MKC is not financially healthy enough and could expect problems in meeting its short term obligations.
MKC has a Current ratio of 0.74. This is amonst the worse of the industry: MKC underperforms 83.53% of its industry peers.
MKC has a Quick Ratio of 0.74. This is a bad value and indicates that MKC is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.31, MKC is doing worse than 91.76% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.74 | ||
| Quick Ratio | 0.31 |
3. Growth
3.1 Past
MKC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.67%, which is quite good.
The Earnings Per Share has been growing slightly by 1.98% on average over the past years.
Looking at the last year, MKC shows a small growth in Revenue. The Revenue has grown by 0.92% in the last year.
MKC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.69% yearly.
EPS 1Y (TTM)9.67%
EPS 3Y-1.11%
EPS 5Y1.98%
EPS Q2Q%-5.88%
Revenue 1Y (TTM)0.92%
Revenue growth 3Y2.1%
Revenue growth 5Y4.69%
Sales Q2Q%2.58%
3.2 Future
Based on estimates for the next years, MKC will show a small growth in Earnings Per Share. The EPS will grow by 6.99% on average per year.
MKC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.48% yearly.
EPS Next Y4.99%
EPS Next 2Y6.4%
EPS Next 3Y7.03%
EPS Next 5Y6.99%
Revenue Next Year1.66%
Revenue Next 2Y2.59%
Revenue Next 3Y2.99%
Revenue Next 5Y3.48%
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
MKC is valuated quite expensively with a Price/Earnings ratio of 28.72.
MKC's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 29.75, MKC is valued at the same level.
The Price/Forward Earnings ratio is 27.36, which means the current valuation is very expensive for MKC.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MKC is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 22.44. MKC is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.72 | ||
| Fwd PE | 27.36 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MKC indicates a slightly more expensive valuation: MKC is more expensive than 62.35% of the companies listed in the same industry.
MKC's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35.12 | ||
| EV/EBITDA | 20.64 |
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)5.76
PEG (5Y)14.53
EPS Next 2Y6.4%
EPS Next 3Y7.03%
5. Dividend
5.1 Amount
MKC has a Yearly Dividend Yield of 2.20%. 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 3.93.
Compared to an average S&P500 Dividend Yield of 2.30, MKC has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.2% |
5.2 History
On average, the dividend of MKC grows each year by 8.09%, which is quite nice.
MKC has been paying a dividend for at least 10 years, so it has a reliable track record.
MKC has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)8.09%
Div Incr Years33
Div Non Decr Years33
5.3 Sustainability
MKC pays out 57.20% of its income as dividend. 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.
DP57.2%
EPS Next 2Y6.4%
EPS Next 3Y7.03%
84.73
+2.12 (+2.57%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners88.85%
Inst Owner Change2.34%
Ins Owners0.01%
Ins Owner Change8.62%
Market Cap22.72B
Analysts73.33
Price Target86.36 (1.92%)
Short Float %2.41%
Short Ratio3.12
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.2% |
Yearly Dividend1.68
Dividend Growth(5Y)8.09%
DP57.2%
Div Incr Years33
Div Non Decr Years33
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)12.18%
Min EPS beat(2)3.07%
Max EPS beat(2)21.3%
EPS beat(4)4
Avg EPS beat(4)12.18%
Min EPS beat(4)3.07%
Max EPS beat(4)21.3%
EPS beat(8)7
Avg EPS beat(8)8.95%
EPS beat(12)8
Avg EPS beat(12)1.62%
EPS beat(16)12
Avg EPS beat(16)4.14%
Revenue beat(2)1
Avg Revenue beat(2)0.07%
Min Revenue beat(2)-0.25%
Max Revenue beat(2)0.39%
Revenue beat(4)2
Avg Revenue beat(4)0.45%
Min Revenue beat(4)-0.29%
Max Revenue beat(4)1.95%
Revenue beat(8)3
Avg Revenue beat(8)-0.51%
Revenue beat(12)4
Avg Revenue beat(12)-1.1%
Revenue beat(16)6
Avg Revenue beat(16)-0.12%
PT rev (1m)-1.76%
PT rev (3m)-1.51%
EPS NQ rev (1m)-0.18%
EPS NQ rev (3m)-7.48%
EPS NY rev (1m)-0.41%
EPS NY rev (3m)-1.75%
Revenue NQ rev (1m)-0.06%
Revenue NQ rev (3m)-1.52%
Revenue NY rev (1m)-0.69%
Revenue NY rev (3m)-1.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.72 | ||
| Fwd PE | 27.36 | ||
| P/S | 3.38 | ||
| P/FCF | 35.12 | ||
| P/OCF | 24.65 | ||
| P/B | 4.29 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.64 |
EPS(TTM)2.95
EY3.48%
EPS(NY)3.1
Fwd EY3.66%
FCF(TTM)2.41
FCFY2.85%
OCF(TTM)3.44
OCFY4.06%
SpS25.07
BVpS19.73
TBVpS-12.14
PEG (NY)5.76
PEG (5Y)14.53
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.03% | ||
| ROE | 14.9% | ||
| ROCE | 10.5% | ||
| ROIC | 7.9% | ||
| ROICexc | 8.04% | ||
| ROICexgc | 43.52% | ||
| OM | 15.91% | ||
| PM (TTM) | 11.73% | ||
| GM | 38.54% | ||
| FCFM | 9.62% |
ROA(3y)5.51%
ROA(5y)5.71%
ROE(3y)14.31%
ROE(5y)15.82%
ROIC(3y)7.52%
ROIC(5y)7.83%
ROICexc(3y)7.68%
ROICexc(5y)8.06%
ROICexgc(3y)53.77%
ROICexgc(5y)64.54%
ROCE(3y)10.15%
ROCE(5y)10.62%
ROICexcg growth 3Y-19.66%
ROICexcg growth 5Y-5.29%
ROICexc growth 3Y-2.95%
ROICexc growth 5Y-2.03%
OM growth 3Y-3%
OM growth 5Y-2.76%
PM growth 3Y-0.64%
PM growth 5Y-2.25%
GM growth 3Y-0.95%
GM growth 5Y-0.8%
F-Score7
Asset Turnover0.51
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 6.71 | ||
| Debt/EBITDA | 3.19 | ||
| Cap/Depr | 131.66% | ||
| Cap/Sales | 4.09% | ||
| Interest Coverage | 5.09 | ||
| Cash Conversion | 72.1% | ||
| Profit Quality | 82.05% | ||
| Current Ratio | 0.74 | ||
| Quick Ratio | 0.31 | ||
| Altman-Z | 2.85 |
F-Score7
WACC8.1%
ROIC/WACC0.98
Cap/Depr(3y)131.56%
Cap/Depr(5y)136.09%
Cap/Sales(3y)4.06%
Cap/Sales(5y)4.12%
Profit Quality(3y)94.06%
Profit Quality(5y)92.84%
High Growth Momentum
Growth
EPS 1Y (TTM)9.67%
EPS 3Y-1.11%
EPS 5Y1.98%
EPS Q2Q%-5.88%
EPS Next Y4.99%
EPS Next 2Y6.4%
EPS Next 3Y7.03%
EPS Next 5Y6.99%
Revenue 1Y (TTM)0.92%
Revenue growth 3Y2.1%
Revenue growth 5Y4.69%
Sales Q2Q%2.58%
Revenue Next Year1.66%
Revenue Next 2Y2.59%
Revenue Next 3Y2.99%
Revenue Next 5Y3.48%
EBIT growth 1Y4.45%
EBIT growth 3Y-0.97%
EBIT growth 5Y1.8%
EBIT Next Year25.05%
EBIT Next 3Y11.6%
EBIT Next 5Y8.66%
FCF growth 1Y-33.53%
FCF growth 3Y5.54%
FCF growth 5Y-3.5%
OCF growth 1Y-25.49%
OCF growth 3Y3.63%
OCF growth 5Y-0.53%