MCCORMICK & CO-NON VTG SHRS (MKC) Stock Fundamental Analysis
NYSE:MKC - New York Stock Exchange, Inc. - US5797802064 - Common Stock - Currency: USD
MKC gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 90 industry peers in the Food Products industry. MKC scores excellent on profitability, but there are concerns on its financial health. MKC is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year MKC was profitable.
MKC had a positive operating cash flow in the past year.
In the past 5 years MKC has always been profitable.
In the past 5 years MKC always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 6.08%, MKC is doing good in the industry, outperforming 70.00% of the companies in the same industry.
MKC has a better Return On Equity (14.47%) than 78.89% of its industry peers.
MKC's Return On Invested Capital of 8.13% is fine compared to the rest of the industry. MKC outperforms 74.44% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MKC is in line with the industry average of 8.94%.
The 3 year average ROIC (7.52%) for MKC is below the current ROIC(8.13%), indicating increased profibility in the last year.
| 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
MKC has a Profit Margin of 11.67%. This is amongst the best in the industry. MKC outperforms 88.89% of its industry peers.
In the last couple of years the Profit Margin of MKC has declined.
The Operating Margin of MKC (15.72%) is better than 86.67% of its industry peers.
In the last couple of years the Operating Margin of MKC has declined.
The Gross Margin of MKC (38.59%) is better than 85.56% 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so MKC is still creating some value.
Compared to 1 year ago, MKC has about the same amount of shares outstanding.
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
MKC has an Altman-Z score of 2.73. This is not the best score and indicates that MKC is in the grey zone with still only limited risk for bankruptcy at the moment.
MKC has a Altman-Z score (2.73) which is comparable to the rest of the industry.
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's Debt to FCF ratio of 6.64 is fine compared to the rest of the industry. MKC outperforms 63.33% 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 (0.66) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.66 | ||
| Debt/FCF | 6.64 | ||
| Altman-Z | 2.73 |
ROIC/WACC1.01
WACC8.05%
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 86.67% of its industry peers.
A Quick Ratio of 0.25 indicates that MKC may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.25, MKC is doing worse than 92.22% of the companies in the same industry.
| 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%.
The Earnings Per Share has been growing slightly by 1.98% on average over the past years.
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.
Based on estimates for the next years, MKC will show a small growth in Revenue. The Revenue will grow by 3.19% on average per year.
EPS Next Y4.49%
EPS Next 2Y6.55%
EPS Next 3Y7.33%
EPS Next 5Y6.51%
Revenue Next Year1.8%
Revenue Next 2Y2.66%
Revenue Next 3Y3.03%
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
The Price/Earnings ratio is 26.03, which means the current valuation is very expensive for MKC.
MKC's Price/Earnings is on the same level as the industry average.
MKC's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.18.
The Price/Forward Earnings ratio is 22.70, which indicates a rather expensive current valuation of MKC.
The rest of the industry has a similar Price/Forward Earnings ratio as MKC.
When comparing the Price/Forward Earnings ratio of MKC to the average of the S&P500 Index (20.81), we can say MKC is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.03 | ||
| Fwd PE | 22.7 |
4.2 Price Multiples
MKC's Enterprise Value to EBITDA ratio is in line with the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as MKC.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.41 | ||
| EV/EBITDA | 18.94 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
MKC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)5.8
PEG (5Y)13.17
EPS Next 2Y6.55%
EPS Next 3Y7.33%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.40%, MKC has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.44, MKC pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.45, MKC has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.4% |
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
58.49% of the earnings are spent on dividend by MKC. This is a bit on the high side, but may be sustainable.
MKC's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP58.49%
EPS Next 2Y6.55%
EPS Next 3Y7.33%
76.02
+0.91 (+1.21%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners88.85%
Inst Owner Change-0.92%
Ins Owners0.01%
Ins Owner Change11.13%
Market Cap20.39B
Analysts71.43
Price Target86.81 (14.19%)
Short Float %2.25%
Short Ratio2.3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.4% |
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)-1.06%
PT rev (3m)-1.24%
EPS NQ rev (1m)-1.48%
EPS NQ rev (3m)-1.42%
EPS NY rev (1m)-0.43%
EPS NY rev (3m)-0.88%
Revenue NQ rev (1m)-0.06%
Revenue NQ rev (3m)-0.06%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.55%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.03 | ||
| Fwd PE | 22.7 | ||
| P/S | 3.03 | ||
| P/FCF | 31.41 | ||
| P/OCF | 22.68 | ||
| P/B | 3.76 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.94 |
EPS(TTM)2.92
EY3.84%
EPS(NY)3.35
Fwd EY4.41%
FCF(TTM)2.42
FCFY3.18%
OCF(TTM)3.35
OCFY4.41%
SpS25.08
BVpS20.22
TBVpS-11.53
PEG (NY)5.8
PEG (5Y)13.17
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 | 2.73 |
F-Score8
WACC8.05%
ROIC/WACC1.01
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 Y4.49%
EPS Next 2Y6.55%
EPS Next 3Y7.33%
EPS Next 5Y6.51%
Revenue 1Y (TTM)0.4%
Revenue growth 3Y2.1%
Revenue growth 5Y4.69%
Sales Q2Q%0.17%
Revenue Next Year1.8%
Revenue Next 2Y2.66%
Revenue Next 3Y3.03%
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%