MCDONALD'S CORP (MCD) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MCD - US5801351017 - Common Stock
305.63 USD
-2.4 (-0.78%)
305.63 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to MCD. MCD was compared to 133 industry peers in the Hotels, Restaurants & Leisure industry. MCD has an excellent profitability rating, but there are some minor concerns on its financial health. MCD is valied quite expensively at the moment, while it does show a decent growth rate. Finally MCD also has an excellent dividend rating. With these ratings, MCD could be worth investigating further for dividend investing!.
1. Profitability
1.1 Basic Checks
In the past year MCD was profitable.
MCD had a positive operating cash flow in the past year.
MCD had positive earnings in each of the past 5 years.
In the past 5 years MCD always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of MCD (13.88%) is better than 90.98% of its industry peers.
MCD's Return On Invested Capital of 17.77% is amongst the best of the industry. MCD outperforms 89.47% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MCD is significantly above the industry average of 10.39%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.88% | ||
| ROE | N/A | ||
| ROIC | 17.77% |
ROA(3y)14.08%
ROA(5y)13.05%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)18.38%
ROIC(5y)16.68%
1.3 Margins
MCD's Profit Margin of 32.04% is amongst the best of the industry. MCD outperforms 97.74% of its industry peers.
In the last couple of years the Profit Margin of MCD has grown nicely.
MCD has a Operating Margin of 46.12%. This is amongst the best in the industry. MCD outperforms 100.00% of its industry peers.
MCD's Operating Margin has improved in the last couple of years.
MCD's Gross Margin of 57.43% is fine compared to the rest of the industry. MCD outperforms 72.18% of its industry peers.
In the last couple of years the Gross Margin of MCD has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 46.12% | ||
| PM (TTM) | 32.04% | ||
| GM | 57.43% |
OM growth 3Y2.46%
OM growth 5Y1.77%
PM growth 3Y-0.79%
PM growth 5Y2.38%
GM growth 3Y1.56%
GM growth 5Y1.64%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so MCD is creating value.
Compared to 1 year ago, MCD has less shares outstanding
Compared to 5 years ago, MCD has less shares outstanding
MCD has about the same debt/assets ratio as last year.
2.2 Solvency
An Altman-Z score of 4.78 indicates that MCD is not in any danger for bankruptcy at the moment.
MCD has a Altman-Z score of 4.78. This is amongst the best in the industry. MCD outperforms 87.97% of its industry peers.
MCD has a debt to FCF ratio of 5.60. This is a neutral value as MCD would need 5.60 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 5.60, MCD is in the better half of the industry, outperforming 74.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.6 | ||
| Altman-Z | 4.78 |
ROIC/WACC2.18
WACC8.17%
2.3 Liquidity
A Current Ratio of 1.00 indicates that MCD should not have too much problems paying its short term obligations.
With a Current ratio value of 1.00, MCD perfoms like the industry average, outperforming 54.14% of the companies in the same industry.
A Quick Ratio of 0.99 indicates that MCD may have some problems paying its short term obligations.
MCD has a Quick ratio (0.99) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1 | ||
| Quick Ratio | 0.99 |
3. Growth
3.1 Past
MCD shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 0.51%.
The Earnings Per Share has been growing by 8.20% on average over the past years. This is quite good.
MCD shows a small growth in Revenue. In the last year, the Revenue has grown by 1.26%.
Measured over the past years, MCD shows a small growth in Revenue. The Revenue has been growing by 3.94% on average per year.
EPS 1Y (TTM)0.51%
EPS 3Y8.12%
EPS 5Y8.2%
EPS Q2Q%-0.31%
Revenue 1Y (TTM)1.26%
Revenue growth 3Y3.73%
Revenue growth 5Y3.94%
Sales Q2Q%2.98%
3.2 Future
MCD is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.93% yearly.
MCD is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.81% yearly.
EPS Next Y4.38%
EPS Next 2Y6.71%
EPS Next 3Y7.35%
EPS Next 5Y10.93%
Revenue Next Year2.57%
Revenue Next 2Y4.05%
Revenue Next 3Y4.41%
Revenue Next 5Y5.81%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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
Based on the Price/Earnings ratio of 25.66, the valuation of MCD can be described as expensive.
The rest of the industry has a similar Price/Earnings ratio as MCD.
The average S&P500 Price/Earnings ratio is at 26.51. MCD is around the same levels.
With a Price/Forward Earnings ratio of 22.88, MCD is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MCD is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of MCD to the average of the S&P500 Index (23.13), we can say MCD is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.66 | ||
| Fwd PE | 22.88 |
4.2 Price Multiples
MCD's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. MCD is more expensive than 63.91% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, MCD is valued a bit cheaper than the industry average as 63.16% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.52 | ||
| EV/EBITDA | 17.95 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MCD does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of MCD may justify a higher PE ratio.
PEG (NY)5.85
PEG (5Y)3.13
EPS Next 2Y6.71%
EPS Next 3Y7.35%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.37%, MCD has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.66, MCD pays a better dividend. On top of this MCD pays more dividend than 84.21% of the companies listed in the same industry.
MCD's Dividend Yield is comparable with the S&P500 average which is at 2.00.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.37% |
5.2 History
On average, the dividend of MCD grows each year by 7.43%, which is quite nice.
MCD has paid a dividend for at least 10 years, which is a reliable track record.
MCD has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)7.43%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
MCD pays out 60.13% of its income as dividend. This is not a sustainable payout ratio.
MCD's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP60.13%
EPS Next 2Y6.71%
EPS Next 3Y7.35%
305.63
-2.4 (-0.78%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners74.95%
Inst Owner Change-1.12%
Ins Owners0.2%
Ins Owner Change-2.34%
Market Cap217.65B
Revenue(TTM)26.27B
Net Income(TTM)8.41B
Analysts71.63
Price Target342.56 (12.08%)
Short Float %1.16%
Short Ratio2.57
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.37% |
Yearly Dividend6.77
Dividend Growth(5Y)7.43%
DP60.13%
Div Incr Years34
Div Non Decr Years34
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.88%
Min EPS beat(2)-4.16%
Max EPS beat(2)0.41%
EPS beat(4)1
Avg EPS beat(4)-1.35%
Min EPS beat(4)-4.16%
Max EPS beat(4)0.41%
EPS beat(8)2
Avg EPS beat(8)-0.99%
EPS beat(12)6
Avg EPS beat(12)2.17%
EPS beat(16)9
Avg EPS beat(16)1.87%
Revenue beat(2)1
Avg Revenue beat(2)-0.08%
Min Revenue beat(2)-1.23%
Max Revenue beat(2)1.06%
Revenue beat(4)1
Avg Revenue beat(4)-1.3%
Min Revenue beat(4)-3.22%
Max Revenue beat(4)1.06%
Revenue beat(8)1
Avg Revenue beat(8)-1.33%
Revenue beat(12)5
Avg Revenue beat(12)0.04%
Revenue beat(16)7
Avg Revenue beat(16)-0.04%
PT rev (1m)0.17%
PT rev (3m)-0.7%
EPS NQ rev (1m)0.08%
EPS NQ rev (3m)-2.99%
EPS NY rev (1m)-1.18%
EPS NY rev (3m)-1.83%
Revenue NQ rev (1m)-0.06%
Revenue NQ rev (3m)-0.99%
Revenue NY rev (1m)-0.23%
Revenue NY rev (3m)-0.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.66 | ||
| Fwd PE | 22.88 | ||
| P/S | 8.29 | ||
| P/FCF | 29.52 | ||
| P/OCF | 20.75 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.95 |
EPS(TTM)11.91
EY3.9%
EPS(NY)13.36
Fwd EY4.37%
FCF(TTM)10.35
FCFY3.39%
OCF(TTM)14.73
OCFY4.82%
SpS36.88
BVpS-3.04
TBVpS-7.68
PEG (NY)5.85
PEG (5Y)3.13
Graham NumberN/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.88% | ||
| ROE | N/A | ||
| ROCE | 22.22% | ||
| ROIC | 17.77% | ||
| ROICexc | 18.59% | ||
| ROICexgc | 19.85% | ||
| OM | 46.12% | ||
| PM (TTM) | 32.04% | ||
| GM | 57.43% | ||
| FCFM | 28.08% |
ROA(3y)14.08%
ROA(5y)13.05%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)18.38%
ROIC(5y)16.68%
ROICexc(3y)19.5%
ROICexc(5y)17.88%
ROICexgc(3y)21.29%
ROICexgc(5y)19.49%
ROCE(3y)23.04%
ROCE(5y)20.89%
ROICexgc growth 3Y2.6%
ROICexgc growth 5Y2.93%
ROICexc growth 3Y2.55%
ROICexc growth 5Y2.53%
OM growth 3Y2.46%
OM growth 5Y1.77%
PM growth 3Y-0.79%
PM growth 5Y2.38%
GM growth 3Y1.56%
GM growth 5Y1.64%
F-Score7
Asset Turnover0.43
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.6 | ||
| Debt/EBITDA | 2.76 | ||
| Cap/Depr | 143.06% | ||
| Cap/Sales | 11.85% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 73.39% | ||
| Profit Quality | 87.63% | ||
| Current Ratio | 1 | ||
| Quick Ratio | 0.99 | ||
| Altman-Z | 4.78 |
F-Score7
WACC8.17%
ROIC/WACC2.18
Cap/Depr(3y)117.68%
Cap/Depr(5y)111.18%
Cap/Sales(3y)9.38%
Cap/Sales(5y)9.09%
Profit Quality(3y)85.21%
Profit Quality(5y)89.5%
High Growth Momentum
Growth
EPS 1Y (TTM)0.51%
EPS 3Y8.12%
EPS 5Y8.2%
EPS Q2Q%-0.31%
EPS Next Y4.38%
EPS Next 2Y6.71%
EPS Next 3Y7.35%
EPS Next 5Y10.93%
Revenue 1Y (TTM)1.26%
Revenue growth 3Y3.73%
Revenue growth 5Y3.94%
Sales Q2Q%2.98%
Revenue Next Year2.57%
Revenue Next 2Y4.05%
Revenue Next 3Y4.41%
Revenue Next 5Y5.81%
EBIT growth 1Y2.6%
EBIT growth 3Y6.28%
EBIT growth 5Y5.78%
EBIT Next Year21.71%
EBIT Next 3Y11.38%
EBIT Next 5Y11.55%
FCF growth 1Y2.48%
FCF growth 3Y-2.05%
FCF growth 5Y3.1%
OCF growth 1Y12.47%
OCF growth 3Y1.11%
OCF growth 5Y3.07%
MCDONALD'S CORP / MCD FAQ
Can you provide the ChartMill fundamental rating for MCDONALD'S CORP?
ChartMill assigns a fundamental rating of 6 / 10 to MCD.
What is the valuation status for MCD stock?
ChartMill assigns a valuation rating of 3 / 10 to MCDONALD'S CORP (MCD). This can be considered as Overvalued.
How profitable is MCDONALD'S CORP (MCD) stock?
MCDONALD'S CORP (MCD) has a profitability rating of 8 / 10.
Can you provide the PE and PB ratios for MCD stock?
The Price/Earnings (PE) ratio for MCDONALD'S CORP (MCD) is 25.66 and the Price/Book (PB) ratio is -100.63.
Can you provide the dividend sustainability for MCD stock?
The dividend rating of MCDONALD'S CORP (MCD) is 7 / 10 and the dividend payout ratio is 60.13%.