MCDONALD'S CORP (MCD) Stock Fundamental Analysis
NYSE:MCD - New York Stock Exchange, Inc. - US5801351017 - Common Stock - Currency: USD
MCD gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 133 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. 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.
MCD had positive earnings in each of the past 5 years.
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 14.49%, MCD belongs to the best of the industry, outperforming 92.48% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 18.02%, MCD belongs to the top of the industry, outperforming 90.23% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for MCD is above the industry average of 13.81%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.49% | ||
| ROE | N/A | ||
| ROIC | 18.02% |
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 Profit Margin of 31.75%. This is amongst the best in the industry. MCD outperforms 100.00% of its industry peers.
In the last couple of years the Profit Margin of MCD has grown nicely.
MCD has a Operating Margin of 45.86%. This is amongst the best in the industry. MCD outperforms 100.00% of its industry peers.
MCD's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 56.83%, MCD is doing good in the industry, outperforming 68.42% of the companies in the same industry.
In the last couple of years the Gross Margin of MCD has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 45.86% | ||
| PM (TTM) | 31.75% | ||
| GM | 56.83% |
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.
The number of shares outstanding for MCD has been reduced compared to 1 year ago.
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 4.94. This indicates that MCD is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of MCD (4.94) is better than 88.72% of its industry peers.
MCD has a debt to FCF ratio of 5.80. This is a neutral value as MCD would need 5.80 years to pay back of all of its debts.
The Debt to FCF ratio of MCD (5.80) is better than 77.44% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.8 | ||
| Altman-Z | 4.94 |
ROIC/WACC2.26
WACC7.96%
2.3 Liquidity
MCD has a Current Ratio of 1.18. This is a normal value and indicates that MCD is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Current ratio value of 1.18, MCD is doing good in the industry, outperforming 61.65% of the companies in the same industry.
A Quick Ratio of 1.17 indicates that MCD should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.17, MCD is doing good in the industry, outperforming 65.41% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.18 | ||
| Quick Ratio | 1.17 |
3. Growth
3.1 Past
The earnings per share for MCD have decreased by -2.58% in the last 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.
The Revenue has decreased by -0.22% in the past 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)-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
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.
The Revenue is expected to grow by 4.81% on average over the next years.
EPS Next Y5.65%
EPS Next 2Y6.88%
EPS Next 3Y7.62%
EPS Next 5Y9.03%
Revenue Next Year1.45%
Revenue Next 2Y3.39%
Revenue Next 3Y4.21%
Revenue Next 5Y4.81%
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 stable.
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 25.43 indicates a quite expensive valuation of MCD.
MCD's Price/Earnings ratio is a bit cheaper when compared to the industry. MCD is cheaper than 61.65% of the companies in the same industry.
When comparing the Price/Earnings ratio of MCD to the average of the S&P500 Index (27.15), we can say MCD is valued inline with the index average.
With a Price/Forward Earnings ratio of 22.20, 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.
The average S&P500 Price/Forward Earnings ratio is at 21.60. MCD is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.43 | ||
| Fwd PE | 22.2 |
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 63.16% of the companies listed in the same industry.
60.90% of the companies in the same industry are more expensive than MCD, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.72 | ||
| EV/EBITDA | 17.75 |
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)4.5
PEG (5Y)3.1
EPS Next 2Y6.88%
EPS Next 3Y7.62%
5. Dividend
5.1 Amount
MCD has a Yearly Dividend Yield of 2.48%. Purely for dividend investing, there may be better candidates out there.
MCD's Dividend Yield is rather good when compared to the industry average which is at 3.71. MCD pays more dividend than 82.71% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, MCD has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.48% |
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 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
60.41% of the earnings are spent on dividend by MCD. This is not a sustainable payout ratio.
The dividend of MCD is growing, but earnings are growing more, so the dividend growth is sustainable.
DP60.41%
EPS Next 2Y6.88%
EPS Next 3Y7.62%
297.49
+5.32 (+1.82%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners75.69%
Inst Owner Change2.57%
Ins Owners0.2%
Ins Owner Change-0.84%
Market Cap212.71B
Analysts75.71
Price Target340.09 (14.32%)
Short Float %1.09%
Short Ratio2.28
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.48% |
Yearly Dividend6.77
Dividend Growth(5Y)7.43%
DP60.41%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.83%
Min EPS beat(2)-1.13%
Max EPS beat(2)-0.53%
EPS beat(4)0
Avg EPS beat(4)-1.51%
Min EPS beat(4)-4.24%
Max EPS beat(4)-0.14%
EPS beat(8)3
Avg EPS beat(8)1.71%
EPS beat(12)7
Avg EPS beat(12)2.92%
EPS beat(16)10
Avg EPS beat(16)3.5%
Revenue beat(2)0
Avg Revenue beat(2)-2.52%
Min Revenue beat(2)-3.22%
Max Revenue beat(2)-1.83%
Revenue beat(4)0
Avg Revenue beat(4)-2.01%
Min Revenue beat(4)-3.22%
Max Revenue beat(4)-0.22%
Revenue beat(8)2
Avg Revenue beat(8)-0.89%
Revenue beat(12)5
Avg Revenue beat(12)0.04%
Revenue beat(16)8
Avg Revenue beat(16)0.33%
PT rev (1m)-0.6%
PT rev (3m)0.82%
EPS NQ rev (1m)0.17%
EPS NQ rev (3m)0.71%
EPS NY rev (1m)-0.15%
EPS NY rev (3m)-0.47%
Revenue NQ rev (1m)-0.06%
Revenue NQ rev (3m)0.72%
Revenue NY rev (1m)0.08%
Revenue NY rev (3m)-0.47%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.43 | ||
| Fwd PE | 22.2 | ||
| P/S | 8.27 | ||
| P/FCF | 31.72 | ||
| P/OCF | 22.43 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.75 |
EPS(TTM)11.7
EY3.93%
EPS(NY)13.4
Fwd EY4.5%
FCF(TTM)9.38
FCFY3.15%
OCF(TTM)13.27
OCFY4.46%
SpS35.95
BVpS-4.83
TBVpS-9.29
PEG (NY)4.5
PEG (5Y)3.1
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.49% | ||
| ROE | N/A | ||
| ROCE | 22.53% | ||
| ROIC | 18.02% | ||
| ROICexc | 18.46% | ||
| ROICexgc | 19.69% | ||
| OM | 45.86% | ||
| PM (TTM) | 31.75% | ||
| GM | 56.83% | ||
| FCFM | 26.09% |
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-Score5
Asset Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.8 | ||
| Debt/EBITDA | 2.8 | ||
| Cap/Depr | 131.89% | ||
| Cap/Sales | 10.81% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 68.26% | ||
| Profit Quality | 82.17% | ||
| Current Ratio | 1.18 | ||
| Quick Ratio | 1.17 | ||
| Altman-Z | 4.94 |
F-Score5
WACC7.96%
ROIC/WACC2.26
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 Y5.65%
EPS Next 2Y6.88%
EPS Next 3Y7.62%
EPS Next 5Y9.03%
Revenue 1Y (TTM)-0.22%
Revenue growth 3Y3.73%
Revenue growth 5Y3.94%
Sales Q2Q%-3.45%
Revenue Next Year1.45%
Revenue Next 2Y3.39%
Revenue Next 3Y4.21%
Revenue Next 5Y4.81%
EBIT growth 1Y-0.13%
EBIT growth 3Y6.28%
EBIT growth 5Y5.78%
EBIT Next Year21.21%
EBIT Next 3Y11.52%
EBIT Next 5Y9.83%
FCF growth 1Y18.21%
FCF growth 3Y-2.05%
FCF growth 5Y3.1%
OCF growth 1Y23.6%
OCF growth 3Y1.11%
OCF growth 5Y3.07%