McCormick (NYSE:MKC) - Share price, News & Analysis

MKC fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	1/6
Past Performance	2/6
Financial Health	1/6
Dividends	5/6

MKC Stock Overview

McCormick & Company, Incorporated manufactures, markets, and distributes spices, seasoning mixes, condiments, and other flavorful products to the food industry.

Rewards

Trading at 36.1% below our estimate of its fair value

Earnings are forecast to grow 9.08% per year

Pays a reliable dividend of 1.64%

Risk Analysis

Debt is not well covered by operating cash flow

McCormick Competitors

Mondelez International

NasdaqGS:MDLZ

US$84.7b

Hershey

NYSE:HSY

US$42.6b

General Mills

NYSE:GIS

US$40.4b

Hormel Foods

NYSE:HRL

US$26.3b

Price History & Performance

Summary of all time highs, changes and price drops for McCormick
Historical stock prices
Current Share Price	US$90.32
52 Week High	US$107.35
52 Week Low	US$77.85
Beta	0.44
1 Month Change	-13.39%
3 Month Change	-7.64%
1 Year Change	-0.31%
3 Year Change	16.40%
5 Year Change	72.89%
Change since IPO	2,719.75%

Recent News & Updates

May 16

Why McCormick Is Substantially Overvalued

DCF analysis indicates minimal pathways to upside. Multiple trades well above the historical range over the last two decades. An inflationary environment, increasing private label competition, and an economic pullback complicate an upside story.

Shareholder Returns

	MKC	US Food	US Market
7D	-9.9%	-7.1%	-2.7%
1Y	-0.3%	-5.2%	-12.9%

Return vs Industry: MKC exceeded the US Food industry which returned -5.2% over the past year.

Return vs Market: MKC exceeded the US Market which returned -12.9% over the past year.

Price Volatility

Is MKC's price volatile compared to industry and market?
MKC volatility
MKC Average Weekly Movement	4.6%
Food Industry Average Movement	6.6%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	2.9%

Stable Share Price: MKC is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: MKC's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1889	14,000	Lawrence Kurzius	https://www.mccormickcorporation.com

McCormick & Company, Incorporated manufactures, markets, and distributes spices, seasoning mixes, condiments, and other flavorful products to the food industry. It operates in two segments, Consumer and Flavor Solutions. The Consumer segment offers spices, herbs, and seasonings, as well as condiments and sauces, and desserts.

McCormick Fundamentals Summary

How do McCormick's earnings and revenue compare to its market cap?
MKC fundamental statistics
Market Cap	US$24.20b
Earnings (TTM)	US$748.40m
Revenue (TTM)	US$6.36b

32.4x

P/E Ratio

3.8x

P/S Ratio

Is MKC overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
MKC income statement (TTM)
Revenue	US$6.36b
Cost of Revenue	US$3.88b
Gross Profit	US$2.48b
Other Expenses	US$1.73b
Earnings	US$748.40m

Last Reported Earnings

Feb 28, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	2.79
Gross Margin	39.04%
Net Profit Margin	11.77%
Debt/Equity Ratio	116.4%

How did MKC perform over the long term?

See historical performance and comparison

Dividends

1.6%

Current Dividend Yield

50%

Payout Ratio

Valuation

Is McCormick undervalued compared to its fair value and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

36.1%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: MKC ($90.32) is trading below our estimate of fair value ($141.4)

Significantly Below Fair Value: MKC is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: MKC is poor value based on its PE Ratio (32.4x) compared to the US Food industry average (18.5x).

PE vs Market: MKC is poor value based on its PE Ratio (32.4x) compared to the US market (15.3x).

Price to Earnings Growth Ratio

PEG Ratio: MKC is poor value based on its PEG Ratio (3.6x)

Price to Book Ratio

PB vs Industry: MKC is overvalued based on its PB Ratio (5.3x) compared to the US Food industry average (1.9x).

Future Growth

How is McCormick forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

9.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: MKC's forecast earnings growth (9.1% per year) is above the savings rate (1.9%).

Earnings vs Market: MKC's earnings (9.1% per year) are forecast to grow slower than the US market (12.5% per year).

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

Revenue vs Market: MKC's revenue (3.6% per year) is forecast to grow slower than the US market (7.8% per year).

High Growth Revenue: MKC's revenue (3.6% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: MKC's Return on Equity is forecast to be low in 3 years time (17.9%).

Past Performance

How has McCormick performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

5.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: MKC has high quality earnings.

Growing Profit Margin: MKC's current net profit margins (11.8%) are lower than last year (13%).

Past Earnings Growth Analysis

Earnings Trend: MKC's earnings have grown by 5.8% per year over the past 5 years.

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

Earnings vs Industry: MKC had negative earnings growth (-2.1%) over the past year, making it difficult to compare to the Food industry average (13%).

Return on Equity

High ROE: MKC's Return on Equity (16.2%) is considered low.

Financial Health

How is McCormick's financial position?

Financial Health Score

1/6

Financial Health Score 1/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: MKC's short term assets ($2.2B) do not cover its short term liabilities ($3.1B).

Long Term Liabilities: MKC's short term assets ($2.2B) do not cover its long term liabilities ($5.2B).

Debt to Equity History and Analysis

Debt Level: MKC's net debt to equity ratio (109.1%) is considered high.

Reducing Debt: MKC's debt to equity ratio has increased from 97.9% to 116.4% over the past 5 years.

Debt Coverage: MKC's debt is not well covered by operating cash flow (16.4%).

Interest Coverage: MKC's interest payments on its debt are well covered by EBIT (8.5x coverage).

Balance Sheet

Dividend

What is McCormick current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.64%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: MKC's dividend (1.64%) is higher than the bottom 25% of dividend payers in the US market (1.58%).

High Dividend: MKC's dividend (1.64%) is low compared to the top 25% of dividend payers in the US market (4.11%).

Stability and Growth of Payments

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

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

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (49.7%), MKC's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (65.5%), MKC's dividend payments are covered by cash flows.

Discover strong dividend paying companies

Management

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

7.1yrs

Average management tenure

CEO

Lawrence Kurzius (63 yo)

7.33yrs

Tenure

US$12,718,656

Compensation

Mr. Lawrence E. Kurzius has been the President at McCormick & Company, Incorporated since January 5, 2015 and has been its Chief Executive Officer since February 1, 2016. Mr. Kurzius served as the Chief Ad...

CEO Compensation Analysis

Compensation vs Market: Lawrence's total compensation ($USD12.72M) is about average for companies of similar size in the US market ($USD13.34M).

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

Leadership Team

Experienced Management: MKC's management team is seasoned and experienced (7.1 years average tenure).

Board Members

Experienced Board: MKC's board of directors are considered experienced (7.3 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.

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/05/21 00:00
End of Day Share Price	2022/05/20 00:00
Earnings	2022/02/28
Annual Earnings	2021/11/30