MCDONALD'S CORP (MCD)

US5801351017 - Common Stock

271.99  +1.01 (+0.37%)

After market: 271.7 -0.29 (-0.11%)

Fundamental Rating

7

We assign a fundamental rating of 7 out of 10 to MCD. 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 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.



9

1. Profitability

1.1 Basic Checks

In the past year MCD was profitable.
In the past year MCD had a positive cash flow from operations.
In the past 5 years MCD has always been profitable.
Each year in the past 5 years MCD had a positive operating cash flow.

1.2 Ratios

MCD's Return On Assets of 15.08% is amongst the best of the industry. MCD outperforms 91.79% of its industry peers.
MCD's Return On Invested Capital of 18.86% is amongst the best of the industry. MCD outperforms 91.04% 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 10.31%.
The last Return On Invested Capital (18.86%) for MCD is above the 3 year average (17.45%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 15.08%
ROE N/A
ROIC 18.86%
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

MCD has a better Profit Margin (33.22%) than 99.25% of its industry peers.
In the last couple of years the Profit Margin of MCD has grown nicely.
Looking at the Operating Margin, with a value of 46.07%, MCD belongs to the top 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 (57.12%) than 64.93% of its industry peers.
In the last couple of years the Gross Margin of MCD has grown nicely.
Industry RankSector Rank
OM 46.07%
PM (TTM) 33.22%
GM 57.12%
OM growth 3Y7.08%
OM growth 5Y2.56%
PM growth 3Y10.49%
PM growth 5Y3.58%
GM growth 3Y4.01%
GM growth 5Y2.31%

6

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
MCD has less shares outstanding than it did 5 years ago.
The debt/assets ratio for MCD is higher compared to a year ago.

2.2 Solvency

An Altman-Z score of 4.68 indicates that MCD is not in any danger for bankruptcy at the moment.
MCD has a better Altman-Z score (4.68) than 89.55% of its industry peers.
MCD has a debt to FCF ratio of 5.64. This is a neutral value as MCD would need 5.64 years to pay back of all of its debts.
MCD has a better Debt to FCF ratio (5.64) than 70.15% of its industry peers.
Industry RankSector Rank
Debt/Equity N/A
Debt/FCF 5.64
Altman-Z 4.68
ROIC/WACC2.24
WACC8.42%

2.3 Liquidity

MCD has a Current Ratio of 1.16. 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 (1.16) which is comparable to the rest of the industry.
MCD has a Quick Ratio of 1.16. 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 better Quick ratio (1.16) than 61.19% of its industry peers.
Industry RankSector Rank
Current Ratio 1.16
Quick Ratio 1.16

6

3. Growth

3.1 Past

MCD shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 18.22%, 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 9.97% in the past year. This is quite good.
The Revenue has been growing slightly by 3.70% on average over the past years.
EPS 1Y (TTM)18.22%
EPS 3Y25.43%
EPS 5Y8.75%
EPS growth Q2Q13.9%
Revenue 1Y (TTM)9.97%
Revenue growth 3Y9.9%
Revenue growth 5Y3.7%
Revenue growth Q2Q8.09%

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 11.06% on average per year.
Based on estimates for the next years, MCD will show a small growth in Revenue. The Revenue will grow by 5.42% on average per year.
EPS Next Y5.11%
EPS Next 2Y7.07%
EPS Next 3Y7.78%
EPS Next 5Y11.06%
Revenue Next Year5.27%
Revenue Next 2Y5.65%
Revenue Next 3Y5.92%
Revenue Next 5Y5.42%

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 accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

3

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 22.78, the valuation of MCD can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of MCD indicates a somewhat cheap valuation: MCD is cheaper than 62.69% of the companies listed in the same industry.
MCD's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.75.
With a Price/Forward Earnings ratio of 21.67, MCD is valued on the expensive side.
The rest of the industry has a similar Price/Forward Earnings ratio as MCD.
MCD is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.23, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 22.78
Fwd PE 21.67

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, MCD is valued a bit more expensive than the industry average as 64.93% of the companies are valued more cheaply.
MCD's Price/Free Cash Flow ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 27.03
EV/EBITDA 16.91

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)4.46
PEG (5Y)2.6
EPS Next 2Y7.07%
EPS Next 3Y7.78%

7

5. Dividend

5.1 Amount

MCD has a Yearly Dividend Yield of 2.47%.
MCD's Dividend Yield is rather good when compared to the industry average which is at 2.63. MCD pays more dividend than 83.58% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.45, MCD has a dividend comparable with the average S&P500 company.
Industry RankSector Rank
Dividend Yield 2.47%

5.2 History

The dividend of MCD is nicely growing with an annual growth rate of 8.37%!
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)8.37%
Div Incr Years19
Div Non Decr Years19

5.3 Sustainability

53.52% 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.
DP53.52%
EPS Next 2Y7.07%
EPS Next 3Y7.78%

MCDONALD'S CORP

NYSE:MCD (4/19/2024, 7:04:00 PM)

After market: 271.7 -0.29 (-0.11%)

271.99

+1.01 (+0.37%)

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 Cap196.10B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 2.47%
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)
Max EPS beat(2)
EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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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 RankSector Rank
PE 22.78
Fwd PE 21.67
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)4.46
PEG (5Y)2.6
Profitability
Industry RankSector Rank
ROA 15.08%
ROE N/A
ROCE
ROIC
ROICexc
ROICexgc
OM 46.07%
PM (TTM) 33.22%
GM 57.12%
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 Turnover0.45
Health
Industry RankSector Rank
Debt/Equity N/A
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 1.16
Quick Ratio 1.16
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)
Growth
EPS 1Y (TTM)18.22%
EPS 3Y25.43%
EPS 5Y
EPS growth Q2Q
EPS Next Y5.11%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)9.97%
Revenue growth 3Y9.9%
Revenue growth 5Y
Revenue growth 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