MCDONALD'S CORP (MCD) Stock Fundamental Analysis
NYSE:MCD - New York Stock Exchange, Inc. - US5801351017 - Common Stock - Currency: USD
Overall MCD gets a fundamental rating of 6 out of 10. We evaluated MCD against 131 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 has a decent growth rate and is not valued too expensively. MCD also has an excellent dividend rating. These ratings could make MCD a good candidate for dividend investing.
1. Profitability
1.1 Basic Checks
In the past year MCD was profitable.
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
The Return On Assets of MCD (14.09%) is better than 90.84% of its industry peers.
MCD has a better Return On Invested Capital (17.40%) than 88.55% of its industry peers.
MCD had an Average Return On Invested Capital over the past 3 years of 18.38%. This is above the industry average of 15.91%.
| 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
The Profit Margin of MCD (32.20%) is better than 100.00% of its industry peers.
In the last couple of years the Profit Margin of MCD has grown nicely.
MCD has a better Operating Margin (46.13%) than 100.00% of its industry peers.
MCD's Operating Margin has improved in the last couple of years.
MCD has a Gross Margin of 57.00%. This is in the better half of the industry: MCD outperforms 69.47% 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.
Compared to 1 year ago, MCD has less shares outstanding
MCD has less shares outstanding than it did 5 years ago.
The debt/assets ratio for MCD has remained at the same level compared to a year ago.
2.2 Solvency
MCD has an Altman-Z score of 4.82. This indicates that MCD is financially healthy and has little risk of bankruptcy at the moment.
MCD has a Altman-Z score of 4.82. This is amongst the best in the industry. MCD outperforms 85.50% 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.
With a decent Debt to FCF ratio value of 6.00, MCD is doing good in the industry, outperforming 74.81% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 6 | ||
| Altman-Z | 4.82 |
ROIC/WACC1.92
WACC9.06%
2.3 Liquidity
MCD has a Current Ratio of 1.30. This is a normal value and indicates that MCD is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.30, MCD is in the better half of the industry, outperforming 66.41% 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.
MCD has a Quick ratio of 1.29. This is in the better half of the industry: MCD outperforms 69.47% of its industry peers.
| 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%.
MCD shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.20% yearly.
Looking at the last year, MCD shows a small growth in Revenue. The Revenue has grown by 1.17% 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)0.93%
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
MCD is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.03% yearly.
Based on estimates for the next years, MCD will show a small growth in Revenue. The Revenue will grow by 4.81% on average per year.
EPS Next Y5.56%
EPS Next 2Y6.85%
EPS Next 3Y7.45%
EPS Next 5Y9.03%
Revenue Next Year1.78%
Revenue Next 2Y3.64%
Revenue Next 3Y4.42%
Revenue Next 5Y4.81%
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
A Price/Earnings ratio of 25.59 indicates a quite expensive valuation of MCD.
Based on the Price/Earnings ratio, MCD is valued a bit cheaper than the industry average as 60.31% of the companies are valued more expensively.
MCD's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.73.
The Price/Forward Earnings ratio is 22.78, which indicates a rather expensive current valuation of MCD.
MCD's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 34.61. MCD is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.59 | ||
| Fwd PE | 22.78 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MCD is valued a bit more expensive than the industry average as 62.60% of the companies are valued more cheaply.
Based on the Price/Free Cash Flow ratio, MCD is valued a bit cheaper than 63.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.62 | ||
| EV/EBITDA | 18.01 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
MCD has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)4.61
PEG (5Y)3.12
EPS Next 2Y6.85%
EPS Next 3Y7.45%
5. Dividend
5.1 Amount
MCD has a Yearly Dividend Yield of 2.33%.
MCD's Dividend Yield is rather good when compared to the industry average which is at 4.00. MCD pays more dividend than 81.68% of the companies in the same industry.
MCD's Dividend Yield is comparable with the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.33% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)7.43%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
59.52% 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.
DP59.52%
EPS Next 2Y6.85%
EPS Next 3Y7.45%
305.07
+3.43 (+1.14%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners75.63%
Inst Owner Change-0.85%
Ins Owners0.2%
Ins Owner Change-0.58%
Market Cap218.13B
Analysts73.33
Price Target339.77 (11.37%)
Short Float %1.24%
Short Ratio2.48
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.33% |
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)-0.09%
PT rev (3m)-0.69%
EPS NQ rev (1m)0.19%
EPS NQ rev (3m)0.84%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.46%
Revenue NQ rev (1m)0.5%
Revenue NQ rev (3m)1.52%
Revenue NY rev (1m)0.24%
Revenue NY rev (3m)0.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.59 | ||
| Fwd PE | 22.78 | ||
| P/S | 8.37 | ||
| P/FCF | 31.62 | ||
| P/OCF | 22.27 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.01 |
EPS(TTM)11.92
EY3.91%
EPS(NY)13.39
Fwd EY4.39%
FCF(TTM)9.65
FCFY3.16%
OCF(TTM)13.7
OCFY4.49%
SpS36.45
BVpS-3.86
TBVpS-8.49
PEG (NY)4.61
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 | 4.82 |
F-Score7
WACC9.06%
ROIC/WACC1.92
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 Y5.56%
EPS Next 2Y6.85%
EPS Next 3Y7.45%
EPS Next 5Y9.03%
Revenue 1Y (TTM)1.17%
Revenue growth 3Y3.73%
Revenue growth 5Y3.94%
Sales Q2Q%5.44%
Revenue Next Year1.78%
Revenue Next 2Y3.64%
Revenue Next 3Y4.42%
Revenue Next 5Y4.81%
EBIT growth 1Y2.2%
EBIT growth 3Y6.28%
EBIT growth 5Y5.78%
EBIT Next Year21.26%
EBIT Next 3Y11.72%
EBIT Next 5Y9.83%
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%