MCKESSON CORP (MCK) Stock Fundamental Analysis
NYSE:MCK - New York Stock Exchange, Inc. - US58155Q1031 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to MCK. MCK was compared to 103 industry peers in the Health Care Providers & Services industry. MCK has only an average score on both its financial health and profitability. MCK has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year MCK was profitable.
MCK had a positive operating cash flow in the past year.
MCK had positive earnings in 4 of the past 5 years.
Each year in the past 5 years MCK had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 4.39%, MCK is doing good in the industry, outperforming 74.76% of the companies in the same industry.
The Return On Invested Capital of MCK (30.35%) is better than 98.06% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MCK is significantly above the industry average of 9.38%.
The 3 year average ROIC (24.61%) for MCK is below the current ROIC(30.35%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.39% | ||
| ROE | N/A | ||
| ROIC | 30.35% |
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
With a Profit Margin value of 0.92%, MCK perfoms like the industry average, outperforming 54.37% of the companies in the same industry.
MCK's Profit Margin has improved in the last couple of years.
MCK has a Operating Margin (1.40%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of MCK has remained more or less at the same level.
With a Gross Margin value of 3.59%, MCK is not doing good in the industry: 80.58% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of MCK has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.4% | ||
| PM (TTM) | 0.92% | ||
| GM | 3.59% |
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
MCK has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
MCK has less shares outstanding than it did 1 year ago.
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
An Altman-Z score of 5.89 indicates that MCK is not in any danger for bankruptcy at the moment.
MCK's Altman-Z score of 5.89 is amongst the best of the industry. MCK outperforms 87.38% of its industry peers.
The Debt to FCF ratio of MCK is 1.08, which is an excellent value as it means it would take MCK, only 1.08 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 1.08, MCK belongs to the best of the industry, outperforming 88.35% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 1.08 | ||
| Altman-Z | 5.89 |
ROIC/WACC3.54
WACC8.58%
2.3 Liquidity
A Current Ratio of 0.90 indicates that MCK may have some problems paying its short term obligations.
MCK's Current ratio of 0.90 is on the low side compared to the rest of the industry. MCK is outperformed by 75.73% of its industry peers.
A Quick Ratio of 0.53 indicates that MCK may have some problems paying its short term obligations.
MCK has a worse Quick ratio (0.53) than 88.35% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.53 |
3. Growth
3.1 Past
MCK shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.44%, which is quite good.
The Earnings Per Share has been growing by 17.17% on average over the past years. This is quite good.
MCK shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 16.22%.
MCK shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.22% yearly.
EPS 1Y (TTM)19.44%
EPS 3Y11.79%
EPS 5Y17.17%
EPS Q2Q%4.82%
Revenue 1Y (TTM)16.22%
Revenue growth 3Y10.8%
Revenue growth 5Y9.22%
Sales Q2Q%23.39%
3.2 Future
MCK is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.18% yearly.
MCK is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.06% yearly.
EPS Next Y14.02%
EPS Next 2Y13.05%
EPS Next 3Y12.66%
EPS Next 5Y13.18%
Revenue Next Year12.04%
Revenue Next 2Y9.93%
Revenue Next 3Y9.19%
Revenue Next 5Y8.06%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
MCK is valuated rather expensively with a Price/Earnings ratio of 20.26.
Based on the Price/Earnings ratio, MCK is valued a bit cheaper than the industry average as 68.93% of the companies are valued more expensively.
MCK is valuated rather cheaply when we compare the Price/Earnings ratio to 26.93, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 16.03, which indicates a correct valuation of MCK.
Based on the Price/Forward Earnings ratio, MCK is valued a bit cheaper than the industry average as 73.79% of the companies are valued more expensively.
MCK's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 35.31.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.26 | ||
| Fwd PE | 16.03 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MCK is on the same level as its industry peers.
MCK's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. MCK is cheaper than 76.70% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.21 | ||
| EV/EBITDA | 14.84 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of MCK may justify a higher PE ratio.
MCK's earnings are expected to grow with 12.66% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.45
PEG (5Y)1.18
EPS Next 2Y13.05%
EPS Next 3Y12.66%
5. Dividend
5.1 Amount
With a yearly dividend of 0.49%, MCK is not a good candidate for dividend investing.
MCK's Dividend Yield is a higher than the industry average which is at 2.90.
Compared to an average S&P500 Dividend Yield of 2.39, MCK's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.49% |
5.2 History
On average, the dividend of MCK grows each year by 10.13%, which is quite nice.
MCK has been paying a dividend for at least 10 years, so it has 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 10.47% 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.
DP10.47%
EPS Next 2Y13.05%
EPS Next 3Y12.66%
NYSE:MCK (8/15/2025, 1:52:37 PM)
678.195
+4.38 (+0.65%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners89.73%
Inst Owner Change-2.7%
Ins Owners0.04%
Ins Owner Change-24.56%
Market Cap84.71B
Analysts82.86
Price Target806.35 (18.9%)
Short Float %1.5%
Short Ratio2.68
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.49% |
Yearly Dividend2.71
Dividend Growth(5Y)10.13%
DP10.47%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.74%
Min EPS beat(2)-0.54%
Max EPS beat(2)2.02%
EPS beat(4)3
Avg EPS beat(4)2.87%
Min EPS beat(4)-0.54%
Max EPS beat(4)8.24%
EPS beat(8)6
Avg EPS beat(8)4.96%
EPS beat(12)8
Avg EPS beat(12)4.52%
EPS beat(16)11
Avg EPS beat(16)7.86%
Revenue beat(2)0
Avg Revenue beat(2)-3.22%
Min Revenue beat(2)-4.64%
Max Revenue beat(2)-1.8%
Revenue beat(4)1
Avg Revenue beat(4)-1.88%
Min Revenue beat(4)-4.89%
Max Revenue beat(4)3.8%
Revenue beat(8)4
Avg Revenue beat(8)-0.48%
Revenue beat(12)6
Avg Revenue beat(12)-0.35%
Revenue beat(16)10
Avg Revenue beat(16)0.53%
PT rev (1m)1.17%
PT rev (3m)9.47%
EPS NQ rev (1m)-0.59%
EPS NQ rev (3m)-2.17%
EPS NY rev (1m)0%
EPS NY rev (3m)1.5%
Revenue NQ rev (1m)0.27%
Revenue NQ rev (3m)2.54%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)-6.67%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.26 | ||
| Fwd PE | 16.03 | ||
| P/S | 0.24 | ||
| P/FCF | 16.21 | ||
| P/OCF | 13.92 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.84 |
EPS(TTM)33.48
EY4.94%
EPS(NY)42.31
Fwd EY6.24%
FCF(TTM)41.84
FCFY6.17%
OCF(TTM)48.72
OCFY7.18%
SpS2874.71
BVpS-16.61
TBVpS-108.57
PEG (NY)1.45
PEG (5Y)1.18
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.39% | ||
| ROE | N/A | ||
| ROCE | 37.18% | ||
| ROIC | 30.35% | ||
| ROICexc | 52.37% | ||
| ROICexgc | N/A | ||
| OM | 1.4% | ||
| PM (TTM) | 0.92% | ||
| GM | 3.59% | ||
| FCFM | 1.46% |
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%
ROICexcg growth 3YN/A
ROICexcg 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-Score6
Asset Turnover4.78
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 1.08 | ||
| Debt/EBITDA | 0.79 | ||
| Cap/Depr | 135.06% | ||
| Cap/Sales | 0.24% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 107.34% | ||
| Profit Quality | 158.6% | ||
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.53 | ||
| Altman-Z | 5.89 |
F-Score6
WACC8.58%
ROIC/WACC3.54
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)19.44%
EPS 3Y11.79%
EPS 5Y17.17%
EPS Q2Q%4.82%
EPS Next Y14.02%
EPS Next 2Y13.05%
EPS Next 3Y12.66%
EPS Next 5Y13.18%
Revenue 1Y (TTM)16.22%
Revenue growth 3Y10.8%
Revenue growth 5Y9.22%
Sales Q2Q%23.39%
Revenue Next Year12.04%
Revenue Next 2Y9.93%
Revenue Next 3Y9.19%
Revenue Next 5Y8.06%
EBIT growth 1Y28.16%
EBIT growth 3Y10.79%
EBIT growth 5Y9.29%
EBIT Next Year21.35%
EBIT Next 3Y12.3%
EBIT Next 5Y9.48%
FCF growth 1Y44.09%
FCF growth 3Y15.87%
FCF growth 5Y6.2%
OCF growth 1Y41.05%
OCF growth 3Y16.04%
OCF growth 5Y6.83%