MCKESSON CORP (MCK) Stock Fundamental Analysis
USA - NYSE:MCK - US58155Q1031 - Common Stock
736.52 USD
-24.06 (-3.16%)
736.52 USD
0 (0%)
MCK gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 101 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 overvalued while it is showing excellent growth. This is an interesting combination. This makes MCK very considerable 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.
Each year in the past 5 years MCK had a positive operating cash flow.
1.2 Ratios
MCK has a Return On Assets of 3.89%. This is in the better half of the industry: MCK outperforms 72.28% of its industry peers.
The Return On Invested Capital of MCK (24.26%) is better than 97.03% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MCK is significantly above the industry average of 9.19%.
| 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
MCK has a Profit Margin (0.84%) which is in line with its industry peers.
In the last couple of years the Profit Margin of MCK has grown nicely.
The Operating Margin of MCK (1.34%) is comparable to the rest of the industry.
MCK's Operating Margin has been stable in the last couple of years.
MCK's Gross Margin of 3.46% is on the low side compared to the rest of the industry. MCK is outperformed by 78.22% 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.
MCK has less shares outstanding than it did 1 year ago.
The number of shares outstanding for MCK has been reduced compared to 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 5.74 indicates that MCK is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.74, MCK belongs to the top of the industry, outperforming 85.15% of the companies in the same industry.
The Debt to FCF ratio of MCK is 1.37, which is an excellent value as it means it would take MCK, only 1.37 years of fcf income to pay off all of its debts.
MCK has a better Debt to FCF ratio (1.37) than 89.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 1.37 | ||
| Altman-Z | 5.74 |
ROIC/WACC2.8
WACC8.65%
2.3 Liquidity
MCK has a Current 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.
With a Current ratio value of 0.88, MCK is not doing good in the industry: 79.21% of the companies in the same industry are doing better.
A Quick Ratio of 0.49 indicates that MCK may have some problems paying its short term obligations.
The Quick ratio of MCK (0.49) is worse than 89.11% 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 nice 19.44% over the past year.
Measured over the past years, MCK shows a quite strong growth in Earnings Per Share. The EPS has been growing by 17.17% on average per year.
MCK shows a strong growth in Revenue. In the last year, the Revenue has grown by 20.35%.
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)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
The Earnings Per Share is expected to grow by 12.90% on average over the next years. This is quite good.
The Revenue is expected to grow by 8.70% on average over the next years. This is quite good.
EPS Next Y14.77%
EPS Next 2Y13.35%
EPS Next 3Y13.12%
EPS Next 5Y12.9%
Revenue Next Year12.47%
Revenue Next 2Y10.08%
Revenue Next 3Y9.23%
Revenue Next 5Y8.7%
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
With a Price/Earnings ratio of 22.00, MCK is valued on the expensive side.
Based on the Price/Earnings ratio, MCK is valued a bit cheaper than the industry average as 66.34% of the companies are valued more expensively.
MCK is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.06, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 17.32, the valuation of MCK can be described as rather expensive.
MCK's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. MCK is cheaper than 66.34% of the companies in the same industry.
MCK is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.64, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22 | ||
| Fwd PE | 17.32 |
4.2 Price Multiples
MCK's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, MCK is valued a bit cheaper than 73.27% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.17 | ||
| EV/EBITDA | 17.63 |
4.3 Compensation for Growth
The 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 13.12% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.49
PEG (5Y)1.28
EPS Next 2Y13.35%
EPS Next 3Y13.12%
5. Dividend
5.1 Amount
MCK has a yearly dividend return of 0.48%, which is pretty low.
Compared to an average industry Dividend Yield of 2.48, MCK pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.38, MCK's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.48% |
5.2 History
On average, the dividend of MCK grows each year by 10.13%, which is quite nice.
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 3Y13.12%
736.52
-24.06 (-3.16%)
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-2.63%
Ins Owners0.04%
Ins Owner Change-21.31%
Market Cap91.61B
Analysts82.73
Price Target801.45 (8.82%)
Short Float %1.51%
Short Ratio2.48
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.48% |
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)-0.61%
PT rev (3m)0.56%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.27%
EPS NY rev (1m)0%
EPS NY rev (3m)0.76%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.31%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22 | ||
| Fwd PE | 17.32 | ||
| P/S | 0.24 | ||
| P/FCF | 16.17 | ||
| P/OCF | 13.99 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.63 |
EPS(TTM)33.48
EY4.55%
EPS(NY)42.53
Fwd EY5.77%
FCF(TTM)45.55
FCFY6.19%
OCF(TTM)52.64
OCFY7.15%
SpS3035.82
BVpS-15.81
TBVpS-141.53
PEG (NY)1.49
PEG (5Y)1.28
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 | 5.74 |
F-Score5
WACC8.65%
ROIC/WACC2.8
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 Y14.77%
EPS Next 2Y13.35%
EPS Next 3Y13.12%
EPS Next 5Y12.9%
Revenue 1Y (TTM)20.35%
Revenue growth 3Y10.8%
Revenue growth 5Y9.22%
Sales Q2Q%23.39%
Revenue Next Year12.47%
Revenue Next 2Y10.08%
Revenue Next 3Y9.23%
Revenue Next 5Y8.7%
EBIT growth 1Y27.64%
EBIT growth 3Y10.79%
EBIT growth 5Y9.29%
EBIT Next Year21.35%
EBIT Next 3Y12.25%
EBIT Next 5Y9.68%
FCF growth 1Y26.87%
FCF growth 3Y15.87%
FCF growth 5Y6.2%
OCF growth 1Y29.69%
OCF growth 3Y16.04%
OCF growth 5Y6.83%