MCDONALD'S CORP (MCD) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MCD - US5801351017 - Common Stock
310.45 USD
+5.55 (+1.82%)
310.2 USD
-0.25 (-0.08%)
We assign a fundamental rating of 6 out of 10 to MCD. MCD was compared to 132 industry peers in the Hotels, Restaurants & Leisure industry. While MCD has a great profitability rating, there are some minor concerns on its financial health. While showing a medium growth rate, MCD is valued expensive at the moment.
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.
Each year in the past 5 years MCD had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 13.88%, MCD belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
With an excellent Return On Invested Capital value of 17.77%, MCD belongs to the best of the industry, outperforming 88.64% 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 significantly above the industry average of 10.41%.
| 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
The Profit Margin of MCD (32.04%) is better than 97.73% of its industry peers.
MCD's Profit Margin has improved in the last couple of years.
MCD has a better Operating Margin (46.12%) than 100.00% of its industry peers.
In the last couple of years the Operating Margin of MCD has grown nicely.
MCD has a Gross Margin of 57.43%. This is in the better half of the industry: MCD outperforms 72.73% of its industry peers.
MCD's Gross Margin has improved in the last couple of years.
| 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
MCD has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, MCD has less shares outstanding
The number of shares outstanding for MCD has been reduced compared to 5 years ago.
MCD has about the same debt/assets ratio as last year.
2.2 Solvency
MCD has an Altman-Z score of 4.81. This indicates that MCD is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.81, MCD belongs to the top of the industry, outperforming 87.88% of the companies in the same industry.
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.
MCD has a Debt to FCF ratio of 5.60. This is in the better half of the industry: MCD outperforms 73.48% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.6 | ||
| Altman-Z | 4.81 |
ROIC/WACC2.28
WACC7.8%
2.3 Liquidity
MCD has a Current Ratio of 1.00. This is a normal value and indicates that MCD is financially healthy and should not expect problems in meeting its short term obligations.
MCD has a Current ratio (1.00) which is in line with its industry peers.
A Quick Ratio of 0.99 indicates that MCD may have some problems paying its short term obligations.
With a Quick ratio value of 0.99, MCD perfoms like the industry average, outperforming 56.82% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1 | ||
| Quick Ratio | 0.99 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 0.51% over the past year.
Measured over the past years, MCD shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.20% on average per year.
Looking at the last year, MCD shows a small growth in Revenue. The Revenue has grown by 1.26% in the last year.
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
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 Y5.63%
EPS Next 2Y6.96%
EPS Next 3Y7.48%
EPS Next 5Y9.23%
Revenue Next Year2.81%
Revenue Next 2Y4.22%
Revenue Next 3Y4.63%
Revenue Next 5Y5.06%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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
MCD is valuated quite expensively with a Price/Earnings ratio of 26.07.
MCD's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of MCD to the average of the S&P500 Index (25.98), we can say MCD is valued inline with the index average.
With a Price/Forward Earnings ratio of 23.13, MCD is valued on the expensive side.
MCD's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 35.79. MCD is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.07 | ||
| Fwd PE | 23.13 |
4.2 Price Multiples
63.64% of the companies in the same industry are cheaper than MCD, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MCD is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.04 | ||
| EV/EBITDA | 18.22 |
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.
MCD has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)4.63
PEG (5Y)3.18
EPS Next 2Y6.96%
EPS Next 3Y7.48%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.45%, MCD has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 6.40, MCD pays a bit more dividend than its industry peers.
MCD's Dividend Yield is comparable with the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.45% |
5.2 History
The dividend of MCD is nicely growing with an annual growth rate of 7.43%!
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)7.43%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
60.13% of the earnings are spent on dividend by MCD. 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 2Y6.96%
EPS Next 3Y7.48%
310.45
+5.55 (+1.82%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners74.98%
Inst Owner Change-1.18%
Ins Owners0.2%
Ins Owner Change-1.98%
Market Cap221.54B
Revenue(TTM)26.27B
Net Income(TTM)8.41B
Analysts72.27
Price Target341.97 (10.15%)
Short Float %1.02%
Short Ratio2.4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.45% |
Yearly Dividend6.77
Dividend Growth(5Y)7.43%
DP60.13%
Div Incr Years34
Div Non Decr Years34
Ex-Date
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)-1.06%
PT rev (3m)-0.69%
EPS NQ rev (1m)-2.03%
EPS NQ rev (3m)-3.07%
EPS NY rev (1m)-0.16%
EPS NY rev (3m)-0.79%
Revenue NQ rev (1m)-0.4%
Revenue NQ rev (3m)-0.96%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)-0.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.07 | ||
| Fwd PE | 23.13 | ||
| P/S | 8.43 | ||
| P/FCF | 30.04 | ||
| P/OCF | 21.12 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.22 |
EPS(TTM)11.91
EY3.84%
EPS(NY)13.42
Fwd EY4.32%
FCF(TTM)10.33
FCFY3.33%
OCF(TTM)14.7
OCFY4.73%
SpS36.81
BVpS-3.03
TBVpS-7.66
PEG (NY)4.63
PEG (5Y)3.18
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 | 4.81 |
F-Score7
WACC7.8%
ROIC/WACC2.28
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 Y5.63%
EPS Next 2Y6.96%
EPS Next 3Y7.48%
EPS Next 5Y9.23%
Revenue 1Y (TTM)1.26%
Revenue growth 3Y3.73%
Revenue growth 5Y3.94%
Sales Q2Q%2.98%
Revenue Next Year2.81%
Revenue Next 2Y4.22%
Revenue Next 3Y4.63%
Revenue Next 5Y5.06%
EBIT growth 1Y2.6%
EBIT growth 3Y6.28%
EBIT growth 5Y5.78%
EBIT Next Year22.23%
EBIT Next 3Y11.93%
EBIT Next 5Y9.88%
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 of MCDONALD'S CORP (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.
What are the PE and PB ratios of MCDONALD'S CORP (MCD) stock?
The Price/Earnings (PE) ratio for MCDONALD'S CORP (MCD) is 26.07 and the Price/Book (PB) ratio is -102.42.
How financially healthy is MCDONALD'S CORP?
The financial health rating of MCDONALD'S CORP (MCD) is 5 / 10.