NYSE:MCD

Stock Analysis Report

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Executive Summary

McDonald's Corporation operates and franchises McDonald's restaurants in the United States and internationally. More Details


Snowflake Analysis

Established dividend payer with questionable track record.


Similar Companies

Share Price & News

How has McDonald's's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MCD is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: MCD's weekly volatility (3%) has been stable over the past year.


Market Performance


7 Day Return

-2.8%

MCD

1.6%

US Hospitality

-0.9%

US Market


1 Year Return

-1.0%

MCD

-12.2%

US Hospitality

19.6%

US Market

Return vs Industry: MCD exceeded the US Hospitality industry which returned -9.8% over the past year.

Return vs Market: MCD underperformed the US Market which returned 21% over the past year.


Shareholder returns

MCDIndustryMarket
7 Day-2.8%1.6%-0.9%
30 Day-1.8%3.7%3.0%
90 Day-8.5%22.2%11.5%
1 Year1.5%-1.0%-11.3%-12.2%22.3%19.6%
3 Year28.3%19.2%-4.9%-10.6%45.3%35.7%
5 Year101.8%77.3%57.0%41.5%124.8%99.9%

Long-Term Price Volatility Vs. Market

How volatile is McDonald's's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is McDonald's undervalued compared to its fair value and its price relative to the market?

31.77x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: MCD ($209.91) is trading above our estimate of fair value ($171.43)

Significantly Below Fair Value: MCD is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: MCD is good value based on its PE Ratio (31.8x) compared to the US Hospitality industry average (35.8x).

PE vs Market: MCD is poor value based on its PE Ratio (31.8x) compared to the US market (21.3x).


Price to Earnings Growth Ratio

PEG Ratio: MCD is poor value based on its PEG Ratio (2x)


Price to Book Ratio

PB vs Industry: MCD has negative assets, so we can't compare its PB Ratio to the US Hospitality industry average.


Next Steps

Future Growth

How is McDonald's forecast to perform in the next 1 to 3 years based on estimates from 29 analysts?

15.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MCD's forecast earnings growth (15.5% per year) is above the savings rate (2%).

Earnings vs Market: MCD's earnings (15.5% per year) are forecast to grow slower than the US market (21.6% per year).

High Growth Earnings: MCD's earnings are forecast to grow, but not significantly.

Revenue vs Market: MCD's revenue (7.3% per year) is forecast to grow slower than the US market (10.2% per year).

High Growth Revenue: MCD's revenue (7.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if MCD's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has McDonald's performed over the past 5 years?

4.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MCD has high quality earnings.

Growing Profit Margin: MCD's current net profit margins (25.9%) are lower than last year (27.8%).


Past Earnings Growth Analysis

Earnings Trend: MCD's earnings have grown by 4.3% per year over the past 5 years.

Accelerating Growth: MCD's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: MCD had negative earnings growth (-16.1%) over the past year, making it difficult to compare to the Hospitality industry average (-53.8%).


Return on Equity

High ROE: MCD's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Next Steps

Financial Health

How is McDonald's's financial position?


Financial Position Analysis

Short Term Liabilities: MCD has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: MCD has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: MCD has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: MCD's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: MCD's debt is not well covered by operating cash flow (16.3%).

Interest Coverage: MCD's interest payments on its debt are well covered by EBIT (6.2x coverage).


Balance Sheet


Next Steps

Dividend

What is McDonald's current dividend yield, its reliability and sustainability?

2.46%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: MCD's dividend (2.46%) is higher than the bottom 25% of dividend payers in the US market (1.38%).

High Dividend: MCD's dividend (2.46%) is low compared to the top 25% of dividend payers in the US market (3.84%).


Stability and Growth of Payments

Stable Dividend: MCD's dividends per share have been stable in the past 10 years.

Growing Dividend: MCD's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (75.7%), MCD's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MCD's dividends in 3 years are forecast to be covered by earnings (62.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.3yrs

Average management tenure


CEO

Chris Kempczinski (51 yo)

1.17yrs

Tenure

US$5,229,155

Compensation

Mr. Christopher J. Kempczinski, also known as Chris, has been the President, Chief Executive Officer and Director at McDonald's Corporation since November 1, 2019. Mr. Kempczinski served as President of US...


CEO Compensation Analysis

Compensation vs Market: Chris's total compensation ($USD5.23M) is below average for companies of similar size in the US market ($USD10.54M).

Compensation vs Earnings: Chris's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Christopher Kempczinski
President1.17yrsUS$5.23m0.0012%
$ 1.9m
Kevin Ozan
Executive VP & CFO5.83yrsUS$5.46m0.0033%
$ 5.2m
Ian Borden
President of International7yrsUS$3.25m0.0018%
$ 2.9m
Joseph Erlinger
President of McDonald's USA1.17yrsUS$4.78m0.0011%
$ 1.7m
Catherine Hoovel
Corporate VP & Chief Accounting Officer4.25yrsno data0.00020%
$ 312.8k
Daniel Henry
Executive VP & Global Chief Information Officer3.25yrsno data0.00037%
$ 578.7k
Mike Flores
Senior VP & Investor Relations Officerno datano datano data
Mahrukh Hussain
Interim General Counsel & Secretary0.25yrno datano data
Alistair Macrow
Senior VP & Global Chief Marketing Officerno datano datano data
Heidi Capozzi
Executive VP & Global Chief People Officer0.75yrno datano data
Radek Janalik
Managing Director of McDonald's Hungaryno datano datano data
Sarah Casanova
MD of Mcdonald’s Malaysia & Regional Manager of Mcdonald’s Singapore and Malaysia8.58yrsno datano data

3.3yrs

Average Tenure

50.5yo

Average Age

Experienced Management: MCD's management team is considered experienced (3.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Christopher Kempczinski
President1.17yrsUS$5.23m0.0012%
$ 1.9m
Richard Lenny
Independent Director15.33yrsUS$317.65k0.00031%
$ 484.9k
Miles White
Independent Director11.75yrsUS$327.54k0.00067%
$ 1.0m
Sheila Penrose
Independent Director14.67yrsUS$327.54k0.00040%
$ 625.6k
Robert Eckert
Independent Director18yrsUS$327.54k0.00067%
$ 1.0m
Andrew McKenna
Chairman Emeritus4.67yrsUS$156.45k0.0058%
$ 9.1m
John Rogers
Independent Director18yrsUS$312.54k0.012%
$ 18.6m
Paul Walsh
Independent Director2yrsUS$288.91k0%
$ 0
Enrique Hernandez
Independent Non-Executive Chairman of the Board4.67yrsUS$805.70k0.00060%
$ 938.4k
Lloyd Dean
Independent Director5.42yrsUS$292.54k0%
$ 0
Mary Margaret Georgiadis
Independent Director6yrsUS$302.54k0.00029%
$ 453.6k
John Mulligan
Independent Director5.42yrsUS$332.54k0.00039%
$ 610.0k

5.7yrs

Average Tenure

65yo

Average Age

Experienced Board: MCD's board of directors are considered experienced (5.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

McDonald's Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: McDonald's Corporation
  • Ticker: MCD
  • Exchange: NYSE
  • Founded: 1940
  • Industry: Restaurants
  • Sector: Consumer Services
  • Market Cap: US$156.406b
  • Shares outstanding: 745.11m
  • Website: https://corporate.mcdonalds.com

Number of Employees


Location

  • McDonald's Corporation
  • 110 North Carpenter Street
  • Chicago
  • Illinois
  • 60607
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MCDNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
MCDSWX (SIX Swiss Exchange)YesCommon StockCHCHFJan 1968
MCDBVL (Bolsa de Valores de Lima)YesCommon StockPEUSDJan 1968
MCD *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
MDODB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
MDOXTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1968
MCDBVC (Bolsa de Valores de Colombia)YesCommon StockCOCOPJan 1968
MCDSNSE (Santiago Stock Exchange)YesCommon StockCLUSDJan 1968
MD-UETLX (Eurotlx)YesCommon StockITEURJan 1968
MCDWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1968
MCDBASE (Buenos Aires Stock Exchange)CEDEAR EACH 8 REP 1ARARSJan 2000
MCDC34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 20 REP 1 COMBRBRLDec 2011

Biography

McDonald's Corporation operates and franchises McDonald's restaurants in the United States and internationally. Its restaurants offer various food products and beverages, as well as breakfast menu. As of D...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/01/15 23:30
End of Day Share Price2021/01/15 00:00
Earnings2020/09/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.