MCCORMICK & CO-NON VTG SHRS (MKC) Stock Fundamental Analysis
NYSE:MKC - New York Stock Exchange, Inc. - US5797802064 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to MKC. MKC was compared to 90 industry peers in the Food Products industry. While MKC belongs to the best of the industry regarding profitability, there are concerns on its financial health. MKC is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
MKC had positive earnings in the past year.
MKC had a positive operating cash flow in the past year.
In the past 5 years MKC has always been profitable.
MKC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
MKC's Return On Assets of 6.08% is fine compared to the rest of the industry. MKC outperforms 73.33% of its industry peers.
With a decent Return On Equity value of 14.47%, MKC is doing good in the industry, outperforming 80.00% of the companies in the same industry.
With a decent Return On Invested Capital value of 8.13%, MKC is doing good in the industry, outperforming 76.67% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for MKC is in line with the industry average of 8.67%.
The last Return On Invested Capital (8.13%) for MKC is above the 3 year average (7.52%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.08% | ||
| ROE | 14.47% | ||
| ROIC | 8.13% |
ROA(3y)5.51%
ROA(5y)5.71%
ROE(3y)14.31%
ROE(5y)15.82%
ROIC(3y)7.52%
ROIC(5y)7.83%
1.3 Margins
With an excellent Profit Margin value of 11.67%, MKC belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.
In the last couple of years the Profit Margin of MKC has declined.
Looking at the Operating Margin, with a value of 15.72%, MKC belongs to the top of the industry, outperforming 88.89% of the companies in the same industry.
MKC's Operating Margin has declined in the last couple of years.
MKC has a better Gross Margin (38.59%) than 86.67% of its industry peers.
In the last couple of years the Gross Margin of MKC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.72% | ||
| PM (TTM) | 11.67% | ||
| GM | 38.59% |
OM growth 3Y-3%
OM growth 5Y-2.76%
PM growth 3Y-0.64%
PM growth 5Y-2.25%
GM growth 3Y-0.95%
GM growth 5Y-0.8%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), MKC is destroying value.
The number of shares outstanding for MKC remains at a similar level compared to 1 year ago.
MKC has more shares outstanding than it did 5 years ago.
The debt/assets ratio for MKC has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.63 indicates that MKC is not a great score, but indicates only limited risk for bankruptcy at the moment.
MKC has a Altman-Z score of 2.63. This is comparable to the rest of the industry: MKC outperforms 58.89% of its industry peers.
MKC has a debt to FCF ratio of 6.64. This is a slightly negative value and a sign of low solvency as MKC would need 6.64 years to pay back of all of its debts.
MKC has a better Debt to FCF ratio (6.64) than 65.56% of its industry peers.
MKC has a Debt/Equity ratio of 0.66. This is a neutral value indicating MKC is somewhat dependend on debt financing.
MKC has a Debt to Equity ratio of 0.66. This is comparable to the rest of the industry: MKC outperforms 42.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.66 | ||
| Debt/FCF | 6.64 | ||
| Altman-Z | 2.63 |
ROIC/WACC0.99
WACC8.21%
2.3 Liquidity
MKC has a Current Ratio of 0.65. This is a bad value and indicates that MKC is not financially healthy enough and could expect problems in meeting its short term obligations.
MKC has a Current ratio of 0.65. This is amonst the worse of the industry: MKC underperforms 85.56% of its industry peers.
A Quick Ratio of 0.25 indicates that MKC may have some problems paying its short term obligations.
MKC has a Quick ratio of 0.25. This is amonst the worse of the industry: MKC underperforms 92.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.65 | ||
| Quick Ratio | 0.25 |
3. Growth
3.1 Past
MKC shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.96%.
Measured over the past 5 years, MKC shows a small growth in Earnings Per Share. The EPS has been growing by 1.98% on average per year.
MKC shows a small growth in Revenue. In the last year, the Revenue has grown by 0.40%.
The Revenue has been growing slightly by 4.69% on average over the past years.
EPS 1Y (TTM)6.96%
EPS 3Y-1.11%
EPS 5Y1.98%
EPS Q2Q%-4.76%
Revenue 1Y (TTM)0.4%
Revenue growth 3Y2.1%
Revenue growth 5Y4.69%
Sales Q2Q%0.17%
3.2 Future
The Earnings Per Share is expected to grow by 6.51% on average over the next years.
The Revenue is expected to grow by 3.19% on average over the next years.
EPS Next Y4.31%
EPS Next 2Y6.49%
EPS Next 3Y7.24%
EPS Next 5Y6.51%
Revenue Next Year1.77%
Revenue Next 2Y2.64%
Revenue Next 3Y3.04%
Revenue Next 5Y3.19%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
MKC is valuated rather expensively with a Price/Earnings ratio of 24.42.
The rest of the industry has a similar Price/Earnings ratio as MKC.
Compared to an average S&P500 Price/Earnings ratio of 25.91, MKC is valued at the same level.
Based on the Price/Forward Earnings ratio of 21.32, the valuation of MKC can be described as rather expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as MKC.
MKC's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.85.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.42 | ||
| Fwd PE | 21.32 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as MKC.
MKC's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.47 | ||
| EV/EBITDA | 17.95 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates MKC does not grow enough to justify the current Price/Earnings ratio.
MKC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)5.67
PEG (5Y)12.36
EPS Next 2Y6.49%
EPS Next 3Y7.24%
5. Dividend
5.1 Amount
MKC has a Yearly Dividend Yield of 2.41%.
Compared to an average industry Dividend Yield of 4.58, MKC pays a bit more dividend than its industry peers.
MKC's Dividend Yield is comparable with the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.41% |
5.2 History
On average, the dividend of MKC grows each year by 8.09%, which is quite nice.
MKC has been paying a dividend for at least 10 years, so it has a reliable track record.
MKC has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)8.09%
Div Incr Years33
Div Non Decr Years33
5.3 Sustainability
MKC pays out 58.49% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of MKC is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP58.49%
EPS Next 2Y6.49%
EPS Next 3Y7.24%
71.31
-1.23 (-1.7%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners88.85%
Inst Owner Change0.49%
Ins Owners0.01%
Ins Owner Change10.79%
Market Cap19.12B
Analysts71.43
Price Target86.52 (21.33%)
Short Float %2.08%
Short Ratio2.15
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.41% |
Yearly Dividend1.68
Dividend Growth(5Y)8.09%
DP58.49%
Div Incr Years33
Div Non Decr Years33
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-2.26%
Min EPS beat(2)-7.59%
Max EPS beat(2)3.07%
EPS beat(4)3
Avg EPS beat(4)8.31%
Min EPS beat(4)-7.59%
Max EPS beat(4)21.3%
EPS beat(8)6
Avg EPS beat(8)6.23%
EPS beat(12)7
Avg EPS beat(12)0.9%
EPS beat(16)11
Avg EPS beat(16)2.3%
Revenue beat(2)1
Avg Revenue beat(2)-0.5%
Min Revenue beat(2)-1.38%
Max Revenue beat(2)0.39%
Revenue beat(4)1
Avg Revenue beat(4)-0.38%
Min Revenue beat(4)-1.38%
Max Revenue beat(4)0.39%
Revenue beat(8)2
Avg Revenue beat(8)-0.75%
Revenue beat(12)3
Avg Revenue beat(12)-1.44%
Revenue beat(16)5
Avg Revenue beat(16)-0.61%
PT rev (1m)-1.4%
PT rev (3m)-1.58%
EPS NQ rev (1m)-0.71%
EPS NQ rev (3m)-2.17%
EPS NY rev (1m)-0.18%
EPS NY rev (3m)-0.65%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.06%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)0.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.42 | ||
| Fwd PE | 21.32 | ||
| P/S | 2.84 | ||
| P/FCF | 29.47 | ||
| P/OCF | 21.27 | ||
| P/B | 3.53 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.95 |
EPS(TTM)2.92
EY4.09%
EPS(NY)3.35
Fwd EY4.69%
FCF(TTM)2.42
FCFY3.39%
OCF(TTM)3.35
OCFY4.7%
SpS25.08
BVpS20.22
TBVpS-11.53
PEG (NY)5.67
PEG (5Y)12.36
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.08% | ||
| ROE | 14.47% | ||
| ROCE | 10.79% | ||
| ROIC | 8.13% | ||
| ROICexc | 8.21% | ||
| ROICexgc | 50.89% | ||
| OM | 15.72% | ||
| PM (TTM) | 11.67% | ||
| GM | 38.59% | ||
| FCFM | 9.65% |
ROA(3y)5.51%
ROA(5y)5.71%
ROE(3y)14.31%
ROE(5y)15.82%
ROIC(3y)7.52%
ROIC(5y)7.83%
ROICexc(3y)7.68%
ROICexc(5y)8.06%
ROICexgc(3y)53.77%
ROICexgc(5y)64.53%
ROCE(3y)10.15%
ROCE(5y)10.62%
ROICexcg growth 3Y-19.64%
ROICexcg growth 5Y-5.32%
ROICexc growth 3Y-2.94%
ROICexc growth 5Y-2.03%
OM growth 3Y-3%
OM growth 5Y-2.76%
PM growth 3Y-0.64%
PM growth 5Y-2.25%
GM growth 3Y-0.95%
GM growth 5Y-0.8%
F-Score8
Asset Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.66 | ||
| Debt/FCF | 6.64 | ||
| Debt/EBITDA | 2.79 | ||
| Cap/Depr | 115.31% | ||
| Cap/Sales | 3.72% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 70.56% | ||
| Profit Quality | 82.7% | ||
| Current Ratio | 0.65 | ||
| Quick Ratio | 0.25 | ||
| Altman-Z | 2.63 |
F-Score8
WACC8.21%
ROIC/WACC0.99
Cap/Depr(3y)131.56%
Cap/Depr(5y)136.09%
Cap/Sales(3y)4.06%
Cap/Sales(5y)4.12%
Profit Quality(3y)94.06%
Profit Quality(5y)92.84%
High Growth Momentum
Growth
EPS 1Y (TTM)6.96%
EPS 3Y-1.11%
EPS 5Y1.98%
EPS Q2Q%-4.76%
EPS Next Y4.31%
EPS Next 2Y6.49%
EPS Next 3Y7.24%
EPS Next 5Y6.51%
Revenue 1Y (TTM)0.4%
Revenue growth 3Y2.1%
Revenue growth 5Y4.69%
Sales Q2Q%0.17%
Revenue Next Year1.77%
Revenue Next 2Y2.64%
Revenue Next 3Y3.04%
Revenue Next 5Y3.19%
EBIT growth 1Y2.14%
EBIT growth 3Y-0.97%
EBIT growth 5Y1.8%
EBIT Next Year25.05%
EBIT Next 3Y11.77%
EBIT Next 5Y8.33%
FCF growth 1Y41.95%
FCF growth 3Y5.54%
FCF growth 5Y-3.5%
OCF growth 1Y21.98%
OCF growth 3Y3.63%
OCF growth 5Y-0.53%