MCDONALD'S CORP (MCD) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:MCD - US5801351017 - Common Stock
315.84 USD
-3.81 (-1.19%)
316.05 USD
+0.21 (+0.07%)
Taking everything into account, MCD scores 6 out of 10 in our fundamental rating. MCD was compared to 133 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. While showing a medium growth rate, MCD is valued expensive at the moment. MCD also has an excellent dividend rating. This makes MCD very considerable 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
MCD's Return On Assets of 13.88% is amongst the best of the industry. MCD outperforms 90.98% of its industry peers.
The Return On Invested Capital of MCD (17.77%) is better than 89.47% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MCD is significantly above the industry average of 10.40%.
| 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
MCD has a better Profit Margin (32.04%) than 97.74% of its industry peers.
In the last couple of years the Profit Margin of MCD has grown nicely.
With an excellent Operating Margin value of 46.12%, MCD belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Operating Margin of MCD has grown nicely.
MCD has a better Gross Margin (57.43%) than 72.18% 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so MCD is creating value.
MCD has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, MCD has less shares outstanding
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 4.85. 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 4.85, MCD belongs to the top of the industry, outperforming 87.22% 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.
With a decent Debt to FCF ratio value of 5.60, MCD is doing good in the industry, outperforming 74.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.6 | ||
| Altman-Z | 4.85 |
ROIC/WACC2.2
WACC8.06%
2.3 Liquidity
A Current Ratio of 1.00 indicates that MCD should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.00, MCD is in line with its industry, outperforming 54.14% of the companies in the same industry.
A Quick Ratio of 0.99 indicates that MCD may have some problems paying its short term obligations.
The Quick ratio of MCD (0.99) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1 | ||
| Quick Ratio | 0.99 |
3. Growth
3.1 Past
MCD shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 0.51%.
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.
MCD shows a small growth in Revenue. In the last year, the Revenue has grown by 1.26%.
MCD shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.94% yearly.
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
The Earnings Per Share is expected to grow by 10.93% on average over the next years. This is quite good.
MCD is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.81% yearly.
EPS Next Y4.44%
EPS Next 2Y6.77%
EPS Next 3Y7.49%
EPS Next 5Y10.93%
Revenue Next Year2.58%
Revenue Next 2Y4.08%
Revenue Next 3Y4.44%
Revenue Next 5Y5.81%
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. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 26.52, MCD can be considered very expensive at the moment.
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 (26.39), we can say MCD is valued inline with the index average.
A Price/Forward Earnings ratio of 23.62 indicates a rather expensive valuation of MCD.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MCD is on the same level as its industry peers.
MCD's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 23.84.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.52 | ||
| Fwd PE | 23.62 |
4.2 Price Multiples
MCD's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. MCD is more expensive than 64.66% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, MCD is valued a bit cheaper than 62.41% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.5 | ||
| EV/EBITDA | 18.46 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of MCD may justify a higher PE ratio.
PEG (NY)5.97
PEG (5Y)3.23
EPS Next 2Y6.77%
EPS Next 3Y7.49%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.33%, 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 1.54. MCD pays more dividend than 83.46% of the companies in the same industry.
MCD's Dividend Yield is a higher than the S&P500 average which is at 1.87.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.33% |
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 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
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 2Y6.77%
EPS Next 3Y7.49%
315.84
-3.81 (-1.19%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners74.95%
Inst Owner Change-1.12%
Ins Owners0.2%
Ins Owner Change-2.49%
Market Cap224.93B
Revenue(TTM)26.27B
Net Income(TTM)8.41B
Analysts71.63
Price Target342.07 (8.3%)
Short Float %0.97%
Short Ratio2.15
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.33% |
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)0.18%
PT rev (3m)-0.85%
EPS NQ rev (1m)-0.12%
EPS NQ rev (3m)-3.12%
EPS NY rev (1m)-1.13%
EPS NY rev (3m)-1.91%
Revenue NQ rev (1m)-0.15%
Revenue NQ rev (3m)-0.92%
Revenue NY rev (1m)-0.23%
Revenue NY rev (3m)-0.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.52 | ||
| Fwd PE | 23.62 | ||
| P/S | 8.56 | ||
| P/FCF | 30.5 | ||
| P/OCF | 21.45 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.46 |
EPS(TTM)11.91
EY3.77%
EPS(NY)13.37
Fwd EY4.23%
FCF(TTM)10.35
FCFY3.28%
OCF(TTM)14.73
OCFY4.66%
SpS36.88
BVpS-3.04
TBVpS-7.68
PEG (NY)5.97
PEG (5Y)3.23
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 | 4.85 |
F-Score7
WACC8.06%
ROIC/WACC2.2
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 Y4.44%
EPS Next 2Y6.77%
EPS Next 3Y7.49%
EPS Next 5Y10.93%
Revenue 1Y (TTM)1.26%
Revenue growth 3Y3.73%
Revenue growth 5Y3.94%
Sales Q2Q%2.98%
Revenue Next Year2.58%
Revenue Next 2Y4.08%
Revenue Next 3Y4.44%
Revenue Next 5Y5.81%
EBIT growth 1Y2.6%
EBIT growth 3Y6.28%
EBIT growth 5Y5.78%
EBIT Next Year21.72%
EBIT Next 3Y11.49%
EBIT Next 5Y11.55%
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 26.52 and the Price/Book (PB) ratio is -103.99.
How financially healthy is MCDONALD'S CORP?
The financial health rating of MCDONALD'S CORP (MCD) is 5 / 10.