MCDONALD'S CORP (MCD) Stock Fundamental Analysis
USA - NYSE:MCD - US5801351017 - Common Stock
305.25 USD
+0.69 (+0.23%)
305 USD
-0.25 (-0.08%)
Overall MCD gets a fundamental rating of 6 out of 10. We evaluated MCD against 135 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 quite expensive at the moment. It does show a decent growth rate. MCD also has an excellent dividend rating. This makes MCD very considerable for dividend investing!
1. Profitability
1.1 Basic Checks
MCD had positive earnings in the past year.
MCD had a positive operating cash flow in the past year.
Each year in the past 5 years MCD has been profitable.
MCD had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
MCD has a Return On Assets of 14.09%. This is amongst the best in the industry. MCD outperforms 91.11% of its industry peers.
With an excellent Return On Invested Capital value of 17.40%, MCD belongs to the best of the industry, outperforming 87.41% of the companies in the same industry.
MCD had an Average Return On Invested Capital over the past 3 years of 18.38%. This is above the industry average of 15.69%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.09% | ||
| ROE | N/A | ||
| ROIC | 17.4% |
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 32.20% is amongst the best of the industry. MCD outperforms 99.26% of its industry peers.
In the last couple of years the Profit Margin of MCD has grown nicely.
The Operating Margin of MCD (46.13%) is better than 100.00% of its industry peers.
In the last couple of years the Operating Margin of MCD has grown nicely.
The Gross Margin of MCD (57.00%) is better than 68.89% of its industry peers.
MCD's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 46.13% | ||
| PM (TTM) | 32.2% | ||
| GM | 57% |
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), MCD is creating value.
MCD has less shares outstanding than it did 1 year ago.
The number of shares outstanding for MCD has been reduced compared to 5 years ago.
Compared to 1 year ago, MCD has about the same debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.84 indicates that MCD is not in any danger for bankruptcy at the moment.
The Altman-Z score of MCD (4.84) is better than 85.19% of its industry peers.
MCD has a debt to FCF ratio of 6.00. This is a slightly negative value and a sign of low solvency as MCD would need 6.00 years to pay back of all of its debts.
MCD has a better Debt to FCF ratio (6.00) than 72.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 6 | ||
| Altman-Z | 4.84 |
ROIC/WACC2.24
WACC7.78%
2.3 Liquidity
A Current Ratio of 1.30 indicates that MCD should not have too much problems paying its short term obligations.
With a decent Current ratio value of 1.30, MCD is doing good in the industry, outperforming 64.44% of the companies in the same industry.
MCD has a Quick Ratio of 1.29. This is a normal value and indicates that MCD is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Quick ratio value of 1.29, MCD is doing good in the industry, outperforming 67.41% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.3 | ||
| Quick Ratio | 1.29 |
3. Growth
3.1 Past
MCD shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 0.93%.
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 1.17%.
MCD shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.94% yearly.
EPS 1Y (TTM)0.93%
EPS 3Y8.12%
EPS 5Y8.2%
EPS Q2Q%7.41%
Revenue 1Y (TTM)1.17%
Revenue growth 3Y3.73%
Revenue growth 5Y3.94%
Sales Q2Q%5.44%
3.2 Future
Based on estimates for the next years, MCD will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.23% on average per year.
MCD is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.06% yearly.
EPS Next Y6.33%
EPS Next 2Y7.41%
EPS Next 3Y7.89%
EPS Next 5Y9.23%
Revenue Next Year2.95%
Revenue Next 2Y4.22%
Revenue Next 3Y4.64%
Revenue Next 5Y5.06%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 25.61 indicates a quite expensive valuation of MCD.
The rest of the industry has a similar Price/Earnings ratio as MCD.
When comparing the Price/Earnings ratio of MCD to the average of the S&P500 Index (27.55), we can say MCD is valued inline with the index average.
With a Price/Forward Earnings ratio of 22.56, MCD is valued on the expensive side.
The rest of the industry has a similar Price/Forward Earnings ratio as MCD.
When comparing the Price/Forward Earnings ratio of MCD to the average of the S&P500 Index (23.04), we can say MCD is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.61 | ||
| Fwd PE | 22.56 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MCD is valued a bit more expensive than the industry average as 64.44% of the companies are valued more cheaply.
MCD's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.58 | ||
| EV/EBITDA | 18.16 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of MCD may justify a higher PE ratio.
PEG (NY)4.04
PEG (5Y)3.12
EPS Next 2Y7.41%
EPS Next 3Y7.89%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.41%, MCD has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 6.98, MCD pays a better dividend. On top of this MCD pays more dividend than 81.48% of the companies listed in the same industry.
MCD's Dividend Yield is comparable with the S&P500 average which is at 2.43.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.41% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)7.43%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
MCD pays out 59.52% of its income as dividend. This is a bit on the high side, but may be sustainable.
MCD's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP59.52%
EPS Next 2Y7.41%
EPS Next 3Y7.89%
305.25
+0.69 (+0.23%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners74.98%
Inst Owner Change-0.07%
Ins Owners0.2%
Ins Owner Change-6.01%
Market Cap217.83B
Analysts72.38
Price Target345.64 (13.23%)
Short Float %1.16%
Short Ratio2.52
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.41% |
Yearly Dividend6.77
Dividend Growth(5Y)7.43%
DP59.52%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.06%
Min EPS beat(2)-0.53%
Max EPS beat(2)0.41%
EPS beat(4)1
Avg EPS beat(4)-0.35%
Min EPS beat(4)-1.13%
Max EPS beat(4)0.41%
EPS beat(8)3
Avg EPS beat(8)0.17%
EPS beat(12)7
Avg EPS beat(12)2.76%
EPS beat(16)10
Avg EPS beat(16)2.82%
Revenue beat(2)1
Avg Revenue beat(2)-1.08%
Min Revenue beat(2)-3.22%
Max Revenue beat(2)1.06%
Revenue beat(4)1
Avg Revenue beat(4)-1.05%
Min Revenue beat(4)-3.22%
Max Revenue beat(4)1.06%
Revenue beat(8)2
Avg Revenue beat(8)-1.08%
Revenue beat(12)6
Avg Revenue beat(12)0.33%
Revenue beat(16)8
Avg Revenue beat(16)0.15%
PT rev (1m)0.22%
PT rev (3m)1.63%
EPS NQ rev (1m)-0.13%
EPS NQ rev (3m)0.73%
EPS NY rev (1m)-0.14%
EPS NY rev (3m)0.73%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)1.97%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)1.39%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.61 | ||
| Fwd PE | 22.56 | ||
| P/S | 8.36 | ||
| P/FCF | 31.58 | ||
| P/OCF | 22.24 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.16 |
EPS(TTM)11.92
EY3.9%
EPS(NY)13.53
Fwd EY4.43%
FCF(TTM)9.67
FCFY3.17%
OCF(TTM)13.72
OCFY4.5%
SpS36.52
BVpS-3.87
TBVpS-8.5
PEG (NY)4.04
PEG (5Y)3.12
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.09% | ||
| ROE | N/A | ||
| ROCE | 21.76% | ||
| ROIC | 17.4% | ||
| ROICexc | 18.01% | ||
| ROICexgc | 19.2% | ||
| OM | 46.13% | ||
| PM (TTM) | 32.2% | ||
| GM | 57% | ||
| FCFM | 26.47% |
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)19.5%
ROCE(3y)23.04%
ROCE(5y)20.89%
ROICexcg growth 3Y2.6%
ROICexcg 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 Turnover0.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 6 | ||
| Debt/EBITDA | 2.88 | ||
| Cap/Depr | 134.76% | ||
| Cap/Sales | 11.11% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 69.11% | ||
| Profit Quality | 82.2% | ||
| Current Ratio | 1.3 | ||
| Quick Ratio | 1.29 | ||
| Altman-Z | 4.84 |
F-Score7
WACC7.78%
ROIC/WACC2.24
Cap/Depr(3y)117.68%
Cap/Depr(5y)111.18%
Cap/Sales(3y)9.38%
Cap/Sales(5y)9.09%
Profit Quality(3y)85.22%
Profit Quality(5y)89.5%
High Growth Momentum
Growth
EPS 1Y (TTM)0.93%
EPS 3Y8.12%
EPS 5Y8.2%
EPS Q2Q%7.41%
EPS Next Y6.33%
EPS Next 2Y7.41%
EPS Next 3Y7.89%
EPS Next 5Y9.23%
Revenue 1Y (TTM)1.17%
Revenue growth 3Y3.73%
Revenue growth 5Y3.94%
Sales Q2Q%5.44%
Revenue Next Year2.95%
Revenue Next 2Y4.22%
Revenue Next 3Y4.64%
Revenue Next 5Y5.06%
EBIT growth 1Y2.2%
EBIT growth 3Y6.28%
EBIT growth 5Y5.78%
EBIT Next Year22.23%
EBIT Next 3Y11.93%
EBIT Next 5Y10.03%
FCF growth 1Y3.89%
FCF growth 3Y-2.05%
FCF growth 5Y3.1%
OCF growth 1Y12.2%
OCF growth 3Y1.11%
OCF growth 5Y3.07%