NYSE:MCD

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Solid track record established dividend payer.


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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.2%

MCD

0.2%

US Hospitality

0.7%

US Market


1 Year Return

3.4%

MCD

9.5%

US Hospitality

13.7%

US Market

Return vs Industry: MCD underperformed the US Hospitality industry which returned 9.5% over the past year.

Return vs Market: MCD underperformed the US Market which returned 13.7% over the past year.


Shareholder returns

MCDIndustryMarket
7 Day0.2%0.2%0.7%
30 Day-7.0%4.0%4.7%
90 Day-11.3%4.1%6.1%
1 Year5.9%3.4%12.3%9.5%16.2%13.7%
3 Year74.3%61.6%34.1%24.6%48.8%39.2%
5 Year131.0%100.6%35.0%20.5%62.5%44.5%

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?

25.22x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: MCD ($193.97) is trading above our estimate of fair value ($136.66)

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


Price To Earnings Ratio

PE vs Industry: MCD is poor value based on its PE Ratio (25.2x) compared to the Hospitality industry average (21.6x).

PE vs Market: MCD is poor value based on its PE Ratio (25.2x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: MCD is poor value based on its PEG Ratio (4.6x)


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 28 analysts?

5.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MCD's forecast earnings growth (5.4% per year) is above the savings rate (2.7%).

Earnings vs Market: MCD's earnings (5.4% per year) are forecast to grow slower than the US market (14.4% per year).

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

Revenue vs Market: MCD's revenue (2.9% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: MCD's revenue (2.9% 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?

5.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MCD has high quality earnings.

Growing Profit Margin: MCD's current net profit margins (28.1%) are higher than last year (24.6%).


Past Earnings Growth Analysis

Earnings Trend: MCD's earnings have grown by 5.9% per year over the past 5 years.

Accelerating Growth: MCD's earnings growth over the past year (12.7%) exceeds its 5-year average (5.9% per year).

Earnings vs Industry: MCD earnings growth over the past year (12.7%) exceeded the Hospitality industry -15.7%.


Return on Equity

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


Return on Assets


Return on Capital Employed


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 well covered by operating cash flow (23.6%).

Interest Coverage: MCD's interest payments on its debt are well covered by EBIT (8.2x coverage).


Balance Sheet

Inventory Level: MCD has a high level of physical assets or inventory.

Debt Coverage by Assets: MCD has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Next Steps

Dividend

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

2.58%

Current Dividend Yield


Upcoming Dividend Payment

Purchase McDonald's before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company2.6%marketbottom25%1.4%markettop25%3.6%industryaverage3.1%forecastin3Years2.6%

Current dividend yield vs market & industry

Notable Dividend: MCD's dividend (2.58%) is higher than the bottom 25% of dividend payers in the US market (1.42%).

High Dividend: MCD's dividend (2.58%) is low compared to the top 25% of dividend payers in the US market (3.65%).


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: With its reasonable payout ratio (60.3%), MCD's dividend 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 (59% payout ratio).


Next Steps

Management

What is the CEO of McDonald's's salary, the management and board of directors tenure and is there insider trading?

3.7yrs

Average management tenure


CEO

Chris Kempczinski (50yo)

0yrs

Tenure

US$4,678,340

Compensation

Mr. Christopher J. Kempczinski, also known as Chris, is the President, CEO and Director at McDonald's Corporation since November 1, 2019. He served as President of USA at McDonald's Corporation since Janua ...


CEO Compensation Analysis

Compensation vs Market: Chris's total compensation ($USD4.68M) is below average for companies of similar size in the US market ($USD11.01M).

Compensation vs Earnings: Chris's compensation has increased by more than 20% in the past year.


Management Age and Tenure

3.7yrs

Average Tenure

52yo

Average Age

Experienced Management: MCD's management team is considered experienced (3.7 years average tenure).


Board Age and Tenure

10.6yrs

Average Tenure

63.5yo

Average Age

Experienced Board: MCD's board of directors are seasoned and experienced ( 10.6 years average tenure).


Insider Trading

Insider Buying: MCD insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$484,57512 Nov 19
Enrique Hernandez
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman of the Board
Shares2,500
Max PriceUS$193.83
BuyUS$251,49807 Nov 19
John Mulligan
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,300
Max PriceUS$193.46
BuyUS$500,03006 Nov 19
Christopher Kempczinski
EntityIndividual
Role
Chief Executive Officer
President
Shares2,580
Max PriceUS$193.81
SellUS$2,118,80903 May 19
Christopher Kempczinski
EntityIndividual
Role
Chief Executive Officer
President
Shares10,854
Max PriceUS$195.21
SellUS$441,33403 May 19
Jerome Krulewitch
EntityIndividual
Role
Chief Legal Officer
Corporate Executive VP
Shares2,257
Max PriceUS$195.54
SellUS$1,959,20003 May 19
Kevin Ozan
EntityIndividual
Role
Chief Financial Officer
Corporate Executive VP & CFO
Shares10,000
Max PriceUS$195.92
SellUS$50,00825 Feb 19
Catherine Hoovel
EntityIndividual
Role
Chief Accounting Officer
Corporate VP & Chief Accounting Officer
Shares280
Max PriceUS$178.60
SellUS$537,76707 Feb 19
Daniel Henry
EntityIndividual
Role
Chief Information Officer
Corporate Executive VP & Chief Information Officer
Shares3,036
Max PriceUS$177.13
SellUS$5,408,10004 Feb 19
Andrew McKenna
EntityIndividual
Role
Chairman Emeritus
Chairman Emeritus
Shares30,000
Max PriceUS$180.27

Ownership Breakdown

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


Management Team

  • Kevin Ozan (56yo)

    Corporate Executive VP & CFO

    • Tenure: 4.7yrs
    • Compensation: US$4.65m
  • Radek Janalik

    Managing Director of McDonald's Hungary

    • Tenure: 0yrs
  • Silvia Lagnado (55yo)

    Corporate Executive VP & Global Chief Marketing Officer

    • Tenure: 4.3yrs
    • Compensation: US$3.97m
  • Sarah Casanova (54yo)

    MD of Mcdonald’s Malaysia & Regional Manager of Mcdonald’s Singapore and Malaysia

    • Tenure: 7.4yrs
  • Chris Kempczinski (50yo)

    President

    • Tenure: 0yrs
    • Compensation: US$4.68m
  • Mike Flores

    Senior VP & Investor Relations Officer

    • Tenure: 0yrs
  • Joe Erlinger (45yo)

    President of McDonald's USA

    • Tenure: 0yrs
    • Compensation: US$3.96m
  • Catherine Hoovel (48yo)

    Corporate VP & Chief Accounting Officer

    • Tenure: 3.1yrs
  • Jerome Krulewitch (54yo)

    Corporate Executive VP

    • Tenure: 2.7yrs
  • Daniel Henry (48yo)

    Corporate Executive VP & Chief Information Officer

    • Tenure: 2.1yrs

Board Members

  • Rick Lenny (67yo)

    Independent Director

    • Tenure: 14.2yrs
    • Compensation: US$296.05k
  • Miles White (64yo)

    Independent Director

    • Tenure: 10.6yrs
    • Compensation: US$311.05k
  • Sheila Penrose (73yo)

    Independent Director

    • Tenure: 13.5yrs
    • Compensation: US$321.05k
  • Robert Eckert (65yo)

    Independent Director

    • Tenure: 16.8yrs
    • Compensation: US$321.05k
  • Andrew McKenna (90yo)

    Chairman Emeritus

    • Tenure: 3.5yrs
    • Compensation: US$156.45k
  • John Rogers (60yo)

    Independent Director

    • Tenure: 16.8yrs
    • Compensation: US$286.05k
  • Rick Hernandez (63yo)

    Non-Executive Chairman of the Board

    • Tenure: 3.5yrs
    • Compensation: US$777.28k
  • Margo Georgiadis (55yo)

    Independent Director

    • Tenure: 4.8yrs
    • Compensation: US$286.05k
  • John Mulligan (53yo)

    Independent Director

    • Tenure: 4.3yrs
    • Compensation: US$326.05k
  • Chris Kempczinski (50yo)

    President

    • Tenure: 0yrs
    • Compensation: US$4.68m

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$146.078b
  • Shares outstanding: 753.09m
  • 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
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
MCDWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1968
MCDBASE (Buenos Aires Stock Exchange)CEDEAR (4 REP 1 USD0.01)ARARSJan 2000
MCDC34BOVESPA (Bolsa de Valores de Sao Paulo)BDR REPR 1/4 COM USD0.01BRBRLDec 2011

Biography

McDonald's Corporation operates and franchises McDonald's restaurants in the United States and internationally. Its restaurants offer various food products, soft drinks, coffee, and other beverages, as wel ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/17 23:43
End of Day Share Price2019/11/15 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


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.