MCKESSON CORP (MCK) Stock Fundamental Analysis
NYSE:MCK - US58155Q1031 - Common Stock
691.45 USD
+0.61 (+0.09%)
691.45 USD
0 (0%)
MCK gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 102 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 overvalued while it is showing excellent growth. This is an interesting combination. With these ratings, MCK could be worth investigating further for growth investing!.
1. Profitability
1.1 Basic Checks
MCK had positive earnings in the past year.
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
The Return On Assets of MCK (3.89%) is better than 73.53% of its industry peers.
MCK's Return On Invested Capital of 24.26% is amongst the best of the industry. MCK outperforms 97.06% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MCK is significantly above the industry average of 9.04%.
| 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.
MCK's Operating Margin of 1.34% is in line compared to the rest of the industry. MCK outperforms 46.08% of its industry peers.
MCK's Operating Margin has been stable in the last couple of years.
With a Gross Margin value of 3.46%, MCK is not doing good in the industry: 78.43% 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 | 1.34% | ||
| 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.
MCK has less shares outstanding than it did 1 year ago.
MCK has less shares outstanding than it did 5 years ago.
MCK has a better debt/assets ratio than last year.
2.2 Solvency
MCK has an Altman-Z score of 5.68. This indicates that MCK is financially healthy and has little risk of bankruptcy at the moment.
MCK's Altman-Z score of 5.68 is amongst the best of the industry. MCK outperforms 85.29% of its industry peers.
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 has a better Debt to FCF ratio (1.37) than 89.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 1.37 | ||
| Altman-Z | 5.68 |
ROIC/WACC2.79
WACC8.69%
2.3 Liquidity
A Current Ratio of 0.88 indicates that MCK may have some problems paying its short term obligations.
MCK has a Current ratio of 0.88. This is in the lower half of the industry: MCK underperforms 77.45% of its industry peers.
A Quick Ratio of 0.49 indicates that MCK may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.49, MCK is doing worse than 89.22% of the companies in the same industry.
| 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.
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.
The Revenue has grown by 20.35% in the past year. This is a very strong growth!
The Revenue has been growing by 9.22% on average over the past years. This is quite good.
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
MCK is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.90% yearly.
Based on estimates for the next years, MCK will show a quite strong growth in Revenue. The Revenue will grow by 8.70% on average per year.
EPS Next Y14.77%
EPS Next 2Y13.35%
EPS Next 3Y12.95%
EPS Next 5Y12.9%
Revenue Next Year12.46%
Revenue Next 2Y10.09%
Revenue Next 3Y9.26%
Revenue Next 5Y8.7%
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
MCK is valuated rather expensively with a Price/Earnings ratio of 20.65.
67.65% 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 27.03, MCK is valued a bit cheaper.
A Price/Forward Earnings ratio of 16.26 indicates a correct valuation of MCK.
Based on the Price/Forward Earnings ratio, MCK is valued a bit cheaper than the industry average as 71.57% 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 22.63.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.65 | ||
| Fwd PE | 16.26 |
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 77.45% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.18 | ||
| EV/EBITDA | 16.11 |
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 12.95% in the coming years.
PEG (NY)1.4
PEG (5Y)1.2
EPS Next 2Y13.35%
EPS Next 3Y12.95%
5. Dividend
5.1 Amount
MCK has a yearly dividend return of 0.48%, which is pretty low.
MCK's Dividend Yield is a higher than the industry average which is at 2.48.
With a Dividend Yield of 0.48, MCK pays less dividend than the S&P500 average, which is at 2.32.
| 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
11.16% of the earnings are spent on dividend by MCK. This is a low number and sustainable payout ratio.
MCK's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP11.16%
EPS Next 2Y13.35%
EPS Next 3Y12.95%
691.45
+0.61 (+0.09%)
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-26.13%
Market Cap86.00B
Analysts82.86
Price Target812.78 (17.55%)
Short Float %1.51%
Short Ratio2.34
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)1.14%
PT rev (3m)10.34%
EPS NQ rev (1m)0.18%
EPS NQ rev (3m)2.25%
EPS NY rev (1m)0.66%
EPS NY rev (3m)0.82%
Revenue NQ rev (1m)0.21%
Revenue NQ rev (3m)3.28%
Revenue NY rev (1m)0.38%
Revenue NY rev (3m)0.43%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.65 | ||
| Fwd PE | 16.26 | ||
| P/S | 0.23 | ||
| P/FCF | 15.18 | ||
| P/OCF | 13.14 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.11 |
EPS(TTM)33.48
EY4.84%
EPS(NY)42.53
Fwd EY6.15%
FCF(TTM)45.55
FCFY6.59%
OCF(TTM)52.64
OCFY7.61%
SpS3035.82
BVpS-15.81
TBVpS-141.53
PEG (NY)1.4
PEG (5Y)1.2
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 | 5.68 |
F-Score5
WACC8.69%
ROIC/WACC2.79
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 3Y12.95%
EPS Next 5Y12.9%
Revenue 1Y (TTM)20.35%
Revenue growth 3Y10.8%
Revenue growth 5Y9.22%
Sales Q2Q%23.39%
Revenue Next Year12.46%
Revenue Next 2Y10.09%
Revenue Next 3Y9.26%
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%