MCKESSON CORP (MCK) Stock Fundamental Analysis
USA - NYSE:MCK - US58155Q1031 - Common Stock
851.99 USD
-6.62 (-0.77%)
852.4 USD
+0.41 (+0.05%)
We assign a fundamental rating of 5 out of 10 to MCK. MCK was compared to 100 industry peers in the Health Care Providers & Services industry. MCK has only an average score on both its financial health and profitability. MCK is not priced too expensively while it is growing strongly. Keep and eye on this one! This makes MCK very considerable for growth investing!
1. Profitability
1.1 Basic Checks
In the past year MCK was profitable.
In the past year MCK had a positive cash flow from operations.
MCK had positive earnings in 4 of the past 5 years.
MCK had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
MCK's Return On Assets of 3.89% is fine compared to the rest of the industry. MCK outperforms 70.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 24.26%, MCK belongs to the top of the industry, outperforming 97.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for MCK is significantly above the industry average of 9.41%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.89% | ||
| ROE | N/A | ||
| ROIC | 24.26% |
ROA(3y)4.85%
ROA(5y)1.87%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)24.61%
ROIC(5y)21.23%
1.3 Margins
The Profit Margin of MCK (0.84%) is comparable to the rest of the industry.
MCK's Profit Margin has improved in the last couple of years.
With a Operating Margin value of 1.34%, MCK perfoms like the industry average, outperforming 44.00% of the companies in the same industry.
MCK's Operating Margin has been stable in the last couple of years.
The Gross Margin of MCK (3.46%) is worse than 80.00% of its industry peers.
MCK's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.34% | ||
| PM (TTM) | 0.84% | ||
| GM | 3.46% |
OM growth 3Y-0.01%
OM growth 5Y0.07%
PM growth 3Y29.56%
PM growth 5Y18.7%
GM growth 3Y-10.54%
GM growth 5Y-7.09%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), MCK is creating value.
Compared to 1 year ago, MCK has less shares outstanding
MCK has less shares outstanding than it did 5 years ago.
The debt/assets ratio for MCK has been reduced compared to a year ago.
2.2 Solvency
MCK has an Altman-Z score of 5.82. This indicates that MCK is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 5.82, MCK belongs to the best of the industry, outperforming 88.00% of the companies in the same industry.
MCK has a debt to FCF ratio of 1.37. This is a very positive value and a sign of high solvency as it would only need 1.37 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.37, MCK belongs to the top of the industry, outperforming 89.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 1.37 | ||
| Altman-Z | 5.82 |
ROIC/WACC2.68
WACC9.06%
2.3 Liquidity
A Current Ratio of 0.88 indicates that MCK may have some problems paying its short term obligations.
MCK's Current ratio of 0.88 is on the low side compared to the rest of the industry. MCK is outperformed by 79.00% of its industry peers.
MCK has a Quick Ratio of 0.88. This is a bad value and indicates that MCK is not financially healthy enough and could expect problems in meeting its short term obligations.
MCK's Quick ratio of 0.49 is on the low side compared to the rest of the industry. MCK is outperformed by 89.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.49 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 25.63% over the past year.
The Earnings Per Share has been growing by 17.17% on average over the past years. This is quite good.
Looking at the last year, MCK shows a quite strong growth in Revenue. The Revenue has grown by 16.22% in the last year.
Measured over the past years, MCK shows a quite strong growth in Revenue. The Revenue has been growing by 9.22% on average per year.
EPS 1Y (TTM)25.63%
EPS 3Y11.79%
EPS 5Y17.17%
EPS Q2Q%39.46%
Revenue 1Y (TTM)16.22%
Revenue growth 3Y10.8%
Revenue growth 5Y9.22%
Sales Q2Q%10.14%
3.2 Future
Based on estimates for the next years, MCK will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.64% on average per year.
Based on estimates for the next years, MCK will show a quite strong growth in Revenue. The Revenue will grow by 8.61% on average per year.
EPS Next Y16.97%
EPS Next 2Y14.98%
EPS Next 3Y14.67%
EPS Next 5Y13.64%
Revenue Next Year12.75%
Revenue Next 2Y10.46%
Revenue Next 3Y9.75%
Revenue Next 5Y8.61%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 23.49, the valuation of MCK can be described as rather expensive.
61.00% of the companies in the same industry are more expensive than MCK, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 26.06, MCK is valued at the same level.
With a Price/Forward Earnings ratio of 19.47, MCK is valued on the expensive side.
Based on the Price/Forward Earnings ratio, MCK is valued a bit cheaper than the industry average as 62.00% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of MCK to the average of the S&P500 Index (32.73), we can say MCK is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.49 | ||
| Fwd PE | 19.47 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as MCK.
MCK's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. MCK is cheaper than 67.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.7 | ||
| EV/EBITDA | 19.63 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as MCK's earnings are expected to grow with 14.67% in the coming years.
PEG (NY)1.38
PEG (5Y)1.37
EPS Next 2Y14.98%
EPS Next 3Y14.67%
5. Dividend
5.1 Amount
With a yearly dividend of 0.38%, MCK is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.54, MCK pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.37, MCK's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.38% |
5.2 History
The dividend of MCK is nicely growing with an annual growth rate of 10.13%!
MCK has paid a dividend for at least 10 years, which is a reliable track record.
MCK has decreased its dividend in the last 3 years.
Dividend Growth(5Y)10.13%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
MCK pays out 11.16% of its income as dividend. This is a sustainable payout ratio.
The dividend of MCK is growing, but earnings are growing more, so the dividend growth is sustainable.
DP11.16%
EPS Next 2Y14.98%
EPS Next 3Y14.67%
851.99
-6.62 (-0.77%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners90.18%
Inst Owner Change-1.71%
Ins Owners0.03%
Ins Owner Change-21.31%
Market Cap105.97B
Revenue(TTM)359.05B
Net Income(TTM)3.16B
Analysts82.73
Price Target854.2 (0.26%)
Short Float %1.87%
Short Ratio3.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.38% |
Yearly Dividend2.71
Dividend Growth(5Y)10.13%
DP11.16%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.21%
Min EPS beat(2)0.39%
Max EPS beat(2)2.02%
EPS beat(4)3
Avg EPS beat(4)0.91%
Min EPS beat(4)-0.54%
Max EPS beat(4)2.02%
EPS beat(8)6
Avg EPS beat(8)2.17%
EPS beat(12)8
Avg EPS beat(12)3.78%
EPS beat(16)11
Avg EPS beat(16)5.83%
Revenue beat(2)1
Avg Revenue beat(2)-1.91%
Min Revenue beat(2)-4.64%
Max Revenue beat(2)0.81%
Revenue beat(4)2
Avg Revenue beat(4)-0.46%
Min Revenue beat(4)-4.64%
Max Revenue beat(4)3.8%
Revenue beat(8)4
Avg Revenue beat(8)-1%
Revenue beat(12)6
Avg Revenue beat(12)-0.46%
Revenue beat(16)10
Avg Revenue beat(16)0.38%
PT rev (1m)1.38%
PT rev (3m)5.93%
EPS NQ rev (1m)0.52%
EPS NQ rev (3m)2.44%
EPS NY rev (1m)1.92%
EPS NY rev (3m)2.59%
Revenue NQ rev (1m)0.29%
Revenue NQ rev (3m)0.27%
Revenue NY rev (1m)0.07%
Revenue NY rev (3m)0.63%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.49 | ||
| Fwd PE | 19.47 | ||
| P/S | 0.28 | ||
| P/FCF | 18.7 | ||
| P/OCF | 16.19 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.63 |
EPS(TTM)36.27
EY4.26%
EPS(NY)43.76
Fwd EY5.14%
FCF(TTM)45.55
FCFY5.35%
OCF(TTM)52.64
OCFY6.18%
SpS3035.82
BVpS-15.81
TBVpS-141.53
PEG (NY)1.38
PEG (5Y)1.37
Graham NumberN/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.89% | ||
| ROE | N/A | ||
| ROCE | 29.72% | ||
| ROIC | 24.26% | ||
| ROICexc | 28.29% | ||
| ROICexgc | N/A | ||
| OM | 1.34% | ||
| PM (TTM) | 0.84% | ||
| GM | 3.46% | ||
| FCFM | 1.5% |
ROA(3y)4.85%
ROA(5y)1.87%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)24.61%
ROIC(5y)21.23%
ROICexc(3y)38.33%
ROICexc(5y)31.81%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)30.15%
ROCE(5y)26.01%
ROICexgc growth 3YN/A
ROICexgc growth 5YN/A
ROICexc growth 3Y25.12%
ROICexc growth 5Y23.76%
OM growth 3Y-0.01%
OM growth 5Y0.07%
PM growth 3Y29.56%
PM growth 5Y18.7%
GM growth 3Y-10.54%
GM growth 5Y-7.09%
F-Score5
Asset Turnover4.64
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 1.37 | ||
| Debt/EBITDA | 1.15 | ||
| Cap/Depr | 141.19% | ||
| Cap/Sales | 0.23% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 115.45% | ||
| Profit Quality | 179.08% | ||
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.49 | ||
| Altman-Z | 5.82 |
F-Score5
WACC9.06%
ROIC/WACC2.68
Cap/Depr(3y)111.68%
Cap/Depr(5y)95.54%
Cap/Sales(3y)0.22%
Cap/Sales(5y)0.23%
Profit Quality(3y)140.62%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)25.63%
EPS 3Y11.79%
EPS 5Y17.17%
EPS Q2Q%39.46%
EPS Next Y16.97%
EPS Next 2Y14.98%
EPS Next 3Y14.67%
EPS Next 5Y13.64%
Revenue 1Y (TTM)16.22%
Revenue growth 3Y10.8%
Revenue growth 5Y9.22%
Sales Q2Q%10.14%
Revenue Next Year12.75%
Revenue Next 2Y10.46%
Revenue Next 3Y9.75%
Revenue Next 5Y8.61%
EBIT growth 1Y27.64%
EBIT growth 3Y10.79%
EBIT growth 5Y9.29%
EBIT Next Year22.3%
EBIT Next 3Y13.48%
EBIT Next 5Y12.4%
FCF growth 1Y26.87%
FCF growth 3Y15.87%
FCF growth 5Y6.2%
OCF growth 1Y29.69%
OCF growth 3Y16.04%
OCF growth 5Y6.83%
MCKESSON CORP / MCK FAQ
What is the ChartMill fundamental rating of MCKESSON CORP (MCK) stock?
ChartMill assigns a fundamental rating of 5 / 10 to MCK.
What is the valuation status of MCKESSON CORP (MCK) stock?
ChartMill assigns a valuation rating of 4 / 10 to MCKESSON CORP (MCK). This can be considered as Fairly Valued.
What is the profitability of MCK stock?
MCKESSON CORP (MCK) has a profitability rating of 5 / 10.
What are the PE and PB ratios of MCKESSON CORP (MCK) stock?
The Price/Earnings (PE) ratio for MCKESSON CORP (MCK) is 23.49 and the Price/Book (PB) ratio is -53.87.
Can you provide the dividend sustainability for MCK stock?
The dividend rating of MCKESSON CORP (MCK) is 5 / 10 and the dividend payout ratio is 11.16%.