MCKESSON CORP (MCK) Stock Fundamental Analysis
USA - NYSE:MCK - US58155Q1031 - Common Stock
775.44 USD
-16.49 (-2.08%)
775.44 USD
0 (0%)
MCK gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 100 industry peers in the Health Care Providers & Services industry. Both the profitability and the financial health of MCK get a neutral evaluation. Nothing too spectacular is happening here. MCK is not priced too expensively while it is growing strongly. Keep and eye on this one! With these ratings, MCK could be worth investigating further for growth investing!.
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.
MCK had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
MCK has a Return On Assets of 3.89%. This is in the better half of the industry: MCK outperforms 71.00% of its industry peers.
MCK's Return On Invested Capital of 24.26% is amongst the best of the industry. MCK outperforms 97.00% of its industry peers.
MCK had an Average Return On Invested Capital over the past 3 years of 24.61%. This is significantly above the industry average of 9.33%.
| 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
Looking at the Profit Margin, with a value of 0.84%, MCK is in line with its industry, outperforming 54.00% of the companies in the same industry.
In the last couple of years the Profit Margin of MCK has grown nicely.
MCK's Operating Margin of 1.34% is in line compared to the rest of the industry. MCK outperforms 45.00% of its industry peers.
MCK's Operating Margin has been stable in the last couple of years.
MCK has a worse Gross Margin (3.46%) 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
MCK has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for MCK has been reduced compared to 1 year ago.
Compared to 5 years ago, MCK has less shares outstanding
Compared to 1 year ago, MCK has an improved debt to assets ratio.
2.2 Solvency
MCK has an Altman-Z score of 5.75. This indicates that MCK is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 5.75, MCK belongs to the best of the industry, outperforming 85.00% 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.
MCK's Debt to FCF ratio of 1.37 is amongst the best of the industry. MCK outperforms 89.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 1.37 | ||
| Altman-Z | 5.75 |
ROIC/WACC2.82
WACC8.6%
2.3 Liquidity
A Current Ratio of 0.88 indicates that MCK may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.88, MCK is doing worse than 80.00% of the companies in the same industry.
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 has a Quick ratio of 0.49. This is amonst the worse of the industry: MCK underperforms 90.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.49 |
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.
MCK shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 17.17% yearly.
The Revenue has grown by 20.35% in the past year. This is a very strong growth!
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)20.35%
Revenue growth 3Y10.8%
Revenue growth 5Y9.22%
Sales Q2Q%23.39%
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 14.34% on average per year.
MCK is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.49% yearly.
EPS Next Y14.76%
EPS Next 2Y13.35%
EPS Next 3Y14.83%
EPS Next 5Y14.34%
Revenue Next Year12.67%
Revenue Next 2Y10.42%
Revenue Next 3Y9.48%
Revenue Next 5Y8.49%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same 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 stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 23.16, MCK is valued on the expensive side.
Based on the Price/Earnings ratio, MCK is valued a bit cheaper than the industry average as 64.00% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of MCK to the average of the S&P500 Index (27.29), we can say MCK is valued inline with the index average.
A Price/Forward Earnings ratio of 18.23 indicates a rather expensive valuation of MCK.
Based on the Price/Forward Earnings ratio, MCK is valued a bit cheaper than the industry average as 67.00% of the companies are valued more expensively.
MCK's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.85.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.16 | ||
| Fwd PE | 18.23 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as MCK.
Based on the Price/Free Cash Flow ratio, MCK is valued a bit cheaper than the industry average as 71.00% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.02 | ||
| EV/EBITDA | 17.95 |
4.3 Compensation for Growth
MCK's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
MCK's earnings are expected to grow with 14.83% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.57
PEG (5Y)1.35
EPS Next 2Y13.35%
EPS Next 3Y14.83%
5. Dividend
5.1 Amount
With a yearly dividend of 0.43%, MCK is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.44, MCK pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.43, MCK pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.43% |
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.
The dividend of MCK decreased 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 2Y13.35%
EPS Next 3Y14.83%
775.44
-16.49 (-2.08%)
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 Change0.01%
Ins Owners0.03%
Ins Owner Change-21.31%
Market Cap96.45B
Analysts82.73
Price Target842.54 (8.65%)
Short Float %1.48%
Short Ratio2.24
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.43% |
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)5.13%
PT rev (3m)5.71%
EPS NQ rev (1m)1.73%
EPS NQ rev (3m)2%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)0.65%
Revenue NQ rev (1m)-0.23%
Revenue NQ rev (3m)-0.16%
Revenue NY rev (1m)0.17%
Revenue NY rev (3m)0.59%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.16 | ||
| Fwd PE | 18.23 | ||
| P/S | 0.26 | ||
| P/FCF | 17.02 | ||
| P/OCF | 14.73 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.95 |
EPS(TTM)33.48
EY4.32%
EPS(NY)42.53
Fwd EY5.48%
FCF(TTM)45.55
FCFY5.87%
OCF(TTM)52.64
OCFY6.79%
SpS3035.82
BVpS-15.81
TBVpS-141.53
PEG (NY)1.57
PEG (5Y)1.35
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%
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-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 | 5.75 |
F-Score5
WACC8.6%
ROIC/WACC2.82
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 Y14.76%
EPS Next 2Y13.35%
EPS Next 3Y14.83%
EPS Next 5Y14.34%
Revenue 1Y (TTM)20.35%
Revenue growth 3Y10.8%
Revenue growth 5Y9.22%
Sales Q2Q%23.39%
Revenue Next Year12.67%
Revenue Next 2Y10.42%
Revenue Next 3Y9.48%
Revenue Next 5Y8.49%
EBIT growth 1Y27.64%
EBIT growth 3Y10.79%
EBIT growth 5Y9.29%
EBIT Next Year22.3%
EBIT Next 3Y13.65%
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%