MCDONALD'S CORP (MCD) Stock Fundamental Analysis
NYSE:MCD - New York Stock Exchange, Inc. - US5801351017 - Common Stock - Currency: USD
Taking everything into account, MCD scores 6 out of 10 in our fundamental rating. MCD was compared to 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 valied quite expensively at the moment, while it does show a decent growth rate. Finally 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.
In the past year MCD had a positive cash flow from operations.
In the past 5 years MCD has always been profitable.
In the past 5 years MCD always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 14.90%, MCD belongs to the best of the industry, outperforming 91.85% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 18.47%, MCD belongs to the top of the industry, outperforming 89.63% 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 14.12%.
The 3 year average ROIC (18.38%) for MCD is below the current ROIC(18.47%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.9% | ||
| ROE | N/A | ||
| ROIC | 18.47% |
ROA(3y)14.08%
ROA(5y)13.05%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)18.38%
ROIC(5y)16.68%
1.3 Margins
Looking at the Profit Margin, with a value of 31.72%, MCD belongs to the top of the industry, outperforming 99.26% of the companies in the same industry.
MCD's Profit Margin has improved in the last couple of years.
MCD has a better Operating Margin (45.73%) 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 56.76%. This is in the better half of the industry: MCD outperforms 68.15% of its industry peers.
MCD's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 45.73% | ||
| PM (TTM) | 31.72% | ||
| GM | 56.76% |
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
Compared to 5 years ago, MCD has less shares outstanding
MCD has about the same debt/assets ratio as last year.
2.2 Solvency
MCD has an Altman-Z score of 5.22. This indicates that MCD is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of MCD (5.22) is better than 88.15% of its industry peers.
MCD has a debt to FCF ratio of 6.03. This is a slightly negative value and a sign of low solvency as MCD would need 6.03 years to pay back of all of its debts.
MCD has a better Debt to FCF ratio (6.03) than 71.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 6.03 | ||
| Altman-Z | 5.22 |
ROIC/WACC2.13
WACC8.67%
2.3 Liquidity
A Current Ratio of 1.19 indicates that MCD should not have too much problems paying its short term obligations.
MCD has a better Current ratio (1.19) than 63.70% of its industry peers.
A Quick Ratio of 1.18 indicates that MCD should not have too much problems paying its short term obligations.
MCD's Quick ratio of 1.18 is fine compared to the rest of the industry. MCD outperforms 68.15% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.19 | ||
| Quick Ratio | 1.18 |
3. Growth
3.1 Past
The earnings per share for MCD have decreased by -2.58% in the last year.
The Earnings Per Share has been growing by 8.20% on average over the past years. This is quite good.
The Revenue has decreased by -0.22% in the past year.
MCD shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.94% yearly.
EPS 1Y (TTM)-2.58%
EPS 3Y8.12%
EPS 5Y8.2%
EPS Q2Q%-1.11%
Revenue 1Y (TTM)-0.22%
Revenue growth 3Y3.73%
Revenue growth 5Y3.94%
Sales Q2Q%-3.45%
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 9.59% on average per year.
Based on estimates for the next years, MCD will show a small growth in Revenue. The Revenue will grow by 5.31% on average per year.
EPS Next Y5.81%
EPS Next 2Y7%
EPS Next 3Y7.81%
EPS Next 5Y9.59%
Revenue Next Year1.36%
Revenue Next 2Y3.39%
Revenue Next 3Y4.22%
Revenue Next 5Y5.31%
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 27.03.
The rest of the industry has a similar Price/Earnings ratio as MCD.
MCD is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.60, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 23.55, 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.
MCD is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.43, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.03 | ||
| Fwd PE | 23.55 |
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 64.44% of the companies listed in the same industry.
MCD's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.89 | ||
| EV/EBITDA | 19.2 |
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)4.65
PEG (5Y)3.3
EPS Next 2Y7%
EPS Next 3Y7.81%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.25%, MCD has a reasonable but not impressive dividend return.
MCD's Dividend Yield is rather good when compared to the industry average which is at 3.55. MCD pays more dividend than 81.48% of the companies in the same industry.
MCD's Dividend Yield is comparable with the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.25% |
5.2 History
The dividend of MCD is nicely growing with an annual growth rate of 7.43%!
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
59.23% 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 more than its dividend. This makes the dividend growth sustainable.
DP59.23%
EPS Next 2Y7%
EPS Next 3Y7.81%
NYSE:MCD (5/21/2025, 11:03:59 AM)
316.3
-3.5 (-1.09%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners73.95%
Inst Owner Change2.54%
Ins Owners0.16%
Ins Owner Change-0.88%
Market Cap226.18B
Analysts77.67
Price Target342.14 (8.17%)
Short Float %1.46%
Short Ratio2.66
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.25% |
Yearly Dividend6.77
Dividend Growth(5Y)7.43%
DP59.23%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.64%
Min EPS beat(2)-1.13%
Max EPS beat(2)-0.14%
EPS beat(4)0
Avg EPS beat(4)-1.78%
Min EPS beat(4)-4.24%
Max EPS beat(4)-0.14%
EPS beat(8)4
Avg EPS beat(8)3.23%
EPS beat(12)8
Avg EPS beat(12)3.3%
EPS beat(16)11
Avg EPS beat(16)3.84%
Revenue beat(2)0
Avg Revenue beat(2)-1.02%
Min Revenue beat(2)-1.83%
Max Revenue beat(2)-0.22%
Revenue beat(4)0
Avg Revenue beat(4)-1.39%
Min Revenue beat(4)-2.76%
Max Revenue beat(4)-0.22%
Revenue beat(8)3
Avg Revenue beat(8)0.08%
Revenue beat(12)6
Avg Revenue beat(12)0.34%
Revenue beat(16)9
Avg Revenue beat(16)0.59%
PT rev (1m)1.39%
PT rev (3m)3.27%
EPS NQ rev (1m)-0.49%
EPS NQ rev (3m)-1.39%
EPS NY rev (1m)-0.22%
EPS NY rev (3m)-0.37%
Revenue NQ rev (1m)-0.53%
Revenue NQ rev (3m)-0.98%
Revenue NY rev (1m)-0.55%
Revenue NY rev (3m)-1.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.03 | ||
| Fwd PE | 23.55 | ||
| P/S | 8.73 | ||
| P/FCF | 33.89 | ||
| P/OCF | 23.94 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.2 |
EPS(TTM)11.7
EY3.7%
EPS(NY)13.43
Fwd EY4.25%
FCF(TTM)9.33
FCFY2.95%
OCF(TTM)13.21
OCFY4.18%
SpS36.25
BVpS-5.31
TBVpS-9.71
PEG (NY)4.65
PEG (5Y)3.3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.9% | ||
| ROE | N/A | ||
| ROCE | 23.09% | ||
| ROIC | 18.47% | ||
| ROICexc | 18.87% | ||
| ROICexgc | 20.13% | ||
| OM | 45.73% | ||
| PM (TTM) | 31.72% | ||
| GM | 56.76% | ||
| FCFM | 25.74% |
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-Score6
Asset Turnover0.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 6.03 | ||
| Debt/EBITDA | 2.88 | ||
| Cap/Depr | 132.33% | ||
| Cap/Sales | 10.71% | ||
| Interest Coverage | 7.78 | ||
| Cash Conversion | 67.73% | ||
| Profit Quality | 81.16% | ||
| Current Ratio | 1.19 | ||
| Quick Ratio | 1.18 | ||
| Altman-Z | 5.22 |
F-Score6
WACC8.67%
ROIC/WACC2.13
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)-2.58%
EPS 3Y8.12%
EPS 5Y8.2%
EPS Q2Q%-1.11%
EPS Next Y5.81%
EPS Next 2Y7%
EPS Next 3Y7.81%
EPS Next 5Y9.59%
Revenue 1Y (TTM)-0.22%
Revenue growth 3Y3.73%
Revenue growth 5Y3.94%
Sales Q2Q%-3.45%
Revenue Next Year1.36%
Revenue Next 2Y3.39%
Revenue Next 3Y4.22%
Revenue Next 5Y5.31%
EBIT growth 1Y0.91%
EBIT growth 3Y6.28%
EBIT growth 5Y5.78%
EBIT Next Year21.66%
EBIT Next 3Y12.05%
EBIT Next 5Y10.24%
FCF growth 1Y-8.02%
FCF growth 3Y-2.05%
FCF growth 5Y3.1%
OCF growth 1Y-1.71%
OCF growth 3Y1.11%
OCF growth 5Y3.07%