MCDONALD'S CORP (MCD)

US5801351017 - Common Stock

282.02  +3.4 (+1.22%)

After market: 281.73 -0.29 (-0.1%)

Fundamental Rating

7

MCD gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 135 industry peers in the Hotels, Restaurants & Leisure industry. While MCD belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. MCD is not valued too expensively and it also shows a decent growth rate. MCD also has an excellent dividend rating. These ratings could make MCD a good candidate for dividend investing.



9

1. Profitability

1.1 Basic Checks

MCD had positive earnings in the past year.
In the past year MCD had a positive cash flow from operations.
Each year in the past 5 years MCD has been profitable.
In the past 5 years MCD always reported a positive cash flow from operatings.

1.2 Ratios

The Return On Assets of MCD (15.08%) is better than 91.79% of its industry peers.
MCD has a better Return On Invested Capital (18.86%) than 91.04% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MCD is significantly above the industry average of 10.25%.
The last Return On Invested Capital (18.86%) for MCD is above the 3 year average (17.45%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 15.08%
ROE N/A
ROIC 18.86%
ROA(3y)13.78%
ROA(5y)12.6%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)17.45%
ROIC(5y)16.19%

1.3 Margins

Looking at the Profit Margin, with a value of 33.22%, MCD belongs to the top of the industry, outperforming 99.25% of the companies in the same industry.
In the last couple of years the Profit Margin of MCD has grown nicely.
With an excellent Operating Margin value of 46.07%, MCD belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
MCD's Operating Margin has improved in the last couple of years.
The Gross Margin of MCD (57.12%) is better than 64.93% of its industry peers.
MCD's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 46.07%
PM (TTM) 33.22%
GM 57.12%
OM growth 3Y7.08%
OM growth 5Y2.56%
PM growth 3Y10.49%
PM growth 5Y3.58%
GM growth 3Y4.01%
GM growth 5Y2.31%

6

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.
The number of shares outstanding for MCD has been reduced compared to 1 year ago.
MCD has less shares outstanding than it did 5 years ago.
The debt/assets ratio for MCD is higher compared to a year ago.

2.2 Solvency

An Altman-Z score of 4.76 indicates that MCD is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.76, MCD belongs to the top of the industry, outperforming 90.30% of the companies in the same industry.
MCD has a debt to FCF ratio of 5.64. This is a neutral value as MCD would need 5.64 years to pay back of all of its debts.
MCD's Debt to FCF ratio of 5.64 is fine compared to the rest of the industry. MCD outperforms 72.39% of its industry peers.
Industry RankSector Rank
Debt/Equity N/A
Debt/FCF 5.64
Altman-Z 4.76
ROIC/WACC2.31
WACC8.16%

2.3 Liquidity

A Current Ratio of 1.16 indicates that MCD should not have too much problems paying its short term obligations.
MCD's Current ratio of 1.16 is in line compared to the rest of the industry. MCD outperforms 57.46% of its industry peers.
MCD has a Quick Ratio of 1.16. 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 1.16, MCD is doing good in the industry, outperforming 61.94% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 1.16
Quick Ratio 1.16

6

3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 18.22% over the past year.
MCD shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.75% yearly.
The Revenue has grown by 9.97% in the past year. This is quite good.
Measured over the past years, MCD shows a small growth in Revenue. The Revenue has been growing by 3.70% on average per year.
EPS 1Y (TTM)18.22%
EPS 3Y25.43%
EPS 5Y8.75%
EPS growth Q2Q13.9%
Revenue 1Y (TTM)9.97%
Revenue growth 3Y9.9%
Revenue growth 5Y3.7%
Revenue growth Q2Q8.09%

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 11.06% on average per year.
The Revenue is expected to grow by 5.42% on average over the next years.
EPS Next Y5.25%
EPS Next 2Y7.16%
EPS Next 3Y7.93%
EPS Next 5Y11.06%
Revenue Next Year5.32%
Revenue Next 2Y5.71%
Revenue Next 3Y5.94%
Revenue Next 5Y5.42%

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

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 23.62 indicates a rather expensive valuation of MCD.
Based on the Price/Earnings ratio, MCD is valued a bit cheaper than the industry average as 65.67% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 26.42, MCD is valued at the same level.
With a Price/Forward Earnings ratio of 22.44, MCD is valued on the expensive side.
Based on the Price/Forward Earnings ratio, MCD is valued a bit cheaper than 60.45% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.74, MCD is valued at the same level.
Industry RankSector Rank
PE 23.62
Fwd PE 22.44

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MCD indicates a slightly more expensive valuation: MCD is more expensive than 63.43% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MCD indicates a somewhat cheap valuation: MCD is cheaper than 62.69% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 28.07
EV/EBITDA 17.46

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)4.5
PEG (5Y)2.7
EPS Next 2Y7.16%
EPS Next 3Y7.93%

7

5. Dividend

5.1 Amount

MCD has a Yearly Dividend Yield of 2.36%. Purely for dividend investing, there may be better candidates out there.
MCD's Dividend Yield is rather good when compared to the industry average which is at 2.48. MCD pays more dividend than 83.58% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, MCD has a dividend comparable with the average S&P500 company.
Industry RankSector Rank
Dividend Yield 2.36%

5.2 History

On average, the dividend of MCD grows each year by 8.37%, which is quite nice.
MCD has been paying a dividend for at least 10 years, so it has a reliable track record.
MCD has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)8.37%
Div Incr Years19
Div Non Decr Years19

5.3 Sustainability

53.52% of the earnings are spent on dividend by MCD. This is a bit on the high side, but may be sustainable.
The dividend of MCD is growing, but earnings are growing more, so the dividend growth is sustainable.
DP53.52%
EPS Next 2Y7.16%
EPS Next 3Y7.93%

MCDONALD'S CORP

NYSE:MCD (3/27/2024, 8:26:49 PM)

After market: 281.73 -0.29 (-0.1%)

282.02

+3.4 (+1.22%)

Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap203.63B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 2.36%
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)
Avg Revenue beat(4)
Min Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
Avg Revenue beat(16)
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 RankSector Rank
PE 23.62
Fwd PE 22.44
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)4.5
PEG (5Y)2.7
Profitability
Industry RankSector Rank
ROA 15.08%
ROE N/A
ROCE
ROIC
ROICexc
ROICexgc
OM 46.07%
PM (TTM) 33.22%
GM 57.12%
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 Turnover0.45
Health
Industry RankSector Rank
Debt/Equity N/A
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 1.16
Quick Ratio 1.16
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)
Growth
EPS 1Y (TTM)18.22%
EPS 3Y25.43%
EPS 5Y
EPS growth Q2Q
EPS Next Y5.25%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)9.97%
Revenue growth 3Y9.9%
Revenue growth 5Y
Revenue growth 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