MCKESSON CORP (MCK)
US58155Q1031 - Common Stock
Taking everything into account, MCK scores 5 out of 10 in our fundamental rating. MCK was compared to 118 industry peers in the Health Care Providers & Services industry. MCK has an average financial health and profitability rating. MCK has a decent growth rate and is not valued too expensively.
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
Looking at the Return On Assets, with a value of 4.51%, MCK is in the better half of the industry, outperforming 77.78% of the companies in the same industry.
MCK has a Return On Invested Capital of 19.18%. This is amongst the best in the industry. MCK outperforms 96.58% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MCK is significantly above the industry average of 8.58%.
The last Return On Invested Capital (19.18%) for MCK is above the 3 year average (17.63%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.51% | ||
| ROE | N/A | ||
| ROIC | 19.18% |
ROA(3y)0.16%
ROA(5y)0.4%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)17.63%
ROIC(5y)15.02%
1.3 Margins
MCK has a Profit Margin of 0.99%. This is in the better half of the industry: MCK outperforms 64.10% of its industry peers.
MCK's Profit Margin has improved in the last couple of years.
MCK has a Operating Margin (1.30%) which is comparable to the rest of the industry.
MCK's Operating Margin has improved in the last couple of years.
MCK has a worse Gross Margin (4.07%) than 82.05% of its industry peers.
MCK's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.3% | ||
| PM (TTM) | 0.99% | ||
| GM | 4.07% |
OM growth 3Y10.72%
OM growth 5Y3.55%
PM growth 3Y48.92%
PM growth 5Y109.14%
GM growth 3Y-4.97%
GM growth 5Y-3.61%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so MCK is creating value.
Compared to 1 year ago, MCK has less shares outstanding
The number of shares outstanding for MCK has been reduced compared to 5 years ago.
MCK has a better debt/assets ratio than last year.
2.2 Solvency
MCK has an Altman-Z score of 5.56. This indicates that MCK is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.56, MCK belongs to the top of the industry, outperforming 89.74% of the companies in the same industry.
The Debt to FCF ratio of MCK is 2.04, which is a good value as it means it would take MCK, 2.04 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 2.04, MCK belongs to the best of the industry, outperforming 86.32% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 2.04 | ||
| Altman-Z | 5.56 |
ROIC/WACC2.21
WACC8.67%
2.3 Liquidity
MCK has a Current Ratio of 0.92. 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 worse Current ratio (0.92) than 73.50% of its industry peers.
MCK has a Quick Ratio of 0.92. 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 0.50. This is amonst the worse of the industry: MCK underperforms 87.18% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.92 | ||
| Quick Ratio | 0.5 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 15.48% 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 15.50% on average per year.
The Revenue has grown by 10.08% in the past year. This is quite good.
MCK shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.84% yearly.
EPS 1Y (TTM)15.48%
EPS 3Y20.12%
EPS 5Y15.5%
EPS growth Q2Q12.17%
Revenue 1Y (TTM)10.08%
Revenue growth 3Y6.2%
Revenue growth 5Y5.84%
Revenue growth Q2Q14.77%
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 12.45% on average per year.
The Revenue is expected to grow by 8.96% on average over the next years. This is quite good.
EPS Next Y7.28%
EPS Next 2Y9.79%
EPS Next 3Y11%
EPS Next 5Y12.45%
Revenue Next Year12.98%
Revenue Next 2Y10.46%
Revenue Next 3Y9.3%
Revenue Next 5Y8.96%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 18.76, the valuation of MCK can be described as rather expensive.
Based on the Price/Earnings ratio, MCK is valued a bit cheaper than 76.07% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.02, MCK is valued a bit cheaper.
MCK is valuated rather expensively with a Price/Forward Earnings ratio of 17.03.
Based on the Price/Forward Earnings ratio, MCK is valued a bit cheaper than the industry average as 70.94% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.58, MCK is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.76 | ||
| Fwd PE | 17.03 |
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.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MCK indicates a somewhat cheap valuation: MCK is cheaper than 70.09% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.24 | ||
| EV/EBITDA | 16.07 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MCK does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of MCK may justify a higher PE ratio.
PEG (NY)2.58
PEG (5Y)1.21
EPS Next 2Y9.79%
EPS Next 3Y11%
5. Dividend
5.1 Amount
MCK has a yearly dividend return of 0.47%, which is pretty low.
MCK's Dividend Yield is rather good when compared to the industry average which is at 2.74. MCK pays more dividend than 80.34% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, MCK's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.47% |
5.2 History
The dividend of MCK is nicely growing with an annual growth rate of 10.37%!
MCK has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of MCK decreased recently.
Dividend Growth(5Y)10.37%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
10.27% 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.
DP10.27%
EPS Next 2Y9.79%
EPS Next 3Y11%
MCKESSON CORP
NYSE:MCK (5/6/2024, 7:13:41 PM)
After market: 533.41 0 (0%)533.41
+4.55 (+0.86%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap70.10B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.47% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.76 | ||
| Fwd PE | 17.03 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.58
PEG (5Y)1.21
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.51% | ||
| ROE | N/A | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 1.3% | ||
| PM (TTM) | 0.99% | ||
| GM | 4.07% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover4.53
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.92 | ||
| Quick Ratio | 0.5 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)15.48%
EPS 3Y20.12%
EPS 5Y
EPS growth Q2Q
EPS Next Y7.28%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)10.08%
Revenue growth 3Y6.2%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y