MCDONALD'S CORP (MCD)
US5801351017 - Common Stock
Overall MCD gets a fundamental rating of 6 out of 10. We evaluated MCD against 136 industry peers in the Hotels, Restaurants & Leisure industry. MCD scores excellent on profitability, 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. These ratings could make MCD a good candidate 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.
Each year in the past 5 years MCD had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 16.06%, MCD belongs to the top of the industry, outperforming 93.33% of the companies in the same industry.
MCD has a Return On Invested Capital of 19.35%. This is amongst the best in the industry. MCD outperforms 91.11% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MCD is significantly above the industry average of 10.04%.
The last Return On Invested Capital (19.35%) for MCD is above the 3 year average (17.45%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.06% | ||
| ROE | N/A | ||
| ROIC | 19.35% |
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
The Profit Margin of MCD (33.36%) is better than 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 (45.81%) is better than 100.00% of its industry peers.
MCD's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 57.01%, MCD is in the better half of the industry, outperforming 62.96% of the companies in the same industry.
In the last couple of years the Gross Margin of MCD has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 45.81% | ||
| PM (TTM) | 33.36% | ||
| GM | 57.01% |
OM growth 3Y7.08%
OM growth 5Y2.56%
PM growth 3Y10.49%
PM growth 5Y3.58%
GM growth 3Y4.01%
GM growth 5Y2.31%
2. Health
2.1 Basic Checks
MCD has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
MCD has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, MCD has less shares outstanding
MCD has a worse debt/assets ratio than last year.
2.2 Solvency
MCD has an Altman-Z score of 4.73. This indicates that MCD is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of MCD (4.73) is better than 91.85% of its industry peers.
The Debt to FCF ratio of MCD is 5.20, which is a neutral value as it means it would take MCD, 5.20 years of fcf income to pay off all of its debts.
MCD has a Debt to FCF ratio of 5.20. This is in the better half of the industry: MCD outperforms 74.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.2 | ||
| Altman-Z | 4.73 |
ROIC/WACC2.43
WACC7.95%
2.3 Liquidity
A Current Ratio of 0.83 indicates that MCD may have some problems paying its short term obligations.
MCD has a Current ratio of 0.83. This is comparable to the rest of the industry: MCD outperforms 44.44% of its industry peers.
MCD has a Quick Ratio of 0.83. This is a bad value and indicates that MCD is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.82, MCD is in line with its industry, outperforming 48.15% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.83 | ||
| Quick Ratio | 0.82 |
3. Growth
3.1 Past
MCD shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 14.93%, which is quite good.
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 10.04% in the past year. This is quite good.
MCD shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.70% yearly.
EPS 1Y (TTM)14.93%
EPS 3Y25.43%
EPS 5Y8.75%
EPS Q2Q%2.66%
Revenue 1Y (TTM)10.04%
Revenue growth 3Y9.9%
Revenue growth 5Y3.7%
Sales Q2Q%4.6%
3.2 Future
The Earnings Per Share is expected to grow by 9.46% on average over the next years. This is quite good.
Based on estimates for the next years, MCD will show a small growth in Revenue. The Revenue will grow by 5.85% on average per year.
EPS Next Y3.16%
EPS Next 2Y5.96%
EPS Next 3Y6.7%
EPS Next 5Y9.46%
Revenue Next Year4.22%
Revenue Next 2Y4.97%
Revenue Next 3Y5.23%
Revenue Next 5Y5.85%
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.
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
The Price/Earnings ratio is 21.10, which indicates a rather expensive current valuation of MCD.
Based on the Price/Earnings ratio, MCD is valued a bit cheaper than 62.96% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 24.29, MCD is valued at the same level.
A Price/Forward Earnings ratio of 18.91 indicates a rather expensive valuation of MCD.
MCD's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.35, MCD is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.1 | ||
| Fwd PE | 18.91 |
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 61.48% 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 60.74% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.44 | ||
| EV/EBITDA | 15.78 |
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)6.68
PEG (5Y)2.41
EPS Next 2Y5.96%
EPS Next 3Y6.7%
5. Dividend
5.1 Amount
MCD has a Yearly Dividend Yield of 2.57%.
Compared to an average industry Dividend Yield of 3.10, MCD pays a better dividend. On top of this MCD pays more dividend than 82.96% of the companies listed in the same industry.
MCD's Dividend Yield is comparable with the S&P500 average which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.57% |
5.2 History
On average, the dividend of MCD grows each year by 8.37%, 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)8.37%
Div Incr Years33
Div Non Decr Years33
5.3 Sustainability
53.84% of the earnings are spent on dividend by MCD. This is a bit on the high side, but may be sustainable.
MCD's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP53.84%
EPS Next 2Y5.96%
EPS Next 3Y6.7%
MCDONALD'S CORP
NYSE:MCD (7/26/2024, 11:54:08 AM)
253.44
+1.98 (+0.79%)
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 Cap182.65B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.57% |
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)
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EPS beat(8)
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EPS beat(16)
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Revenue beat(2)
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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 Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.1 | ||
| Fwd PE | 18.91 | ||
| 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)6.68
PEG (5Y)2.41
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.06% | ||
| ROE | N/A | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 45.81% | ||
| PM (TTM) | 33.36% | ||
| GM | 57.01% | ||
| 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 Turnover0.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.83 | ||
| Quick Ratio | 0.82 | ||
| 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)
High Growth Momentum
Growth
EPS 1Y (TTM)14.93%
EPS 3Y25.43%
EPS 5Y
EPS Q2Q%
EPS Next Y3.16%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)10.04%
Revenue growth 3Y9.9%
Revenue growth 5Y
Sales 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