NYSE:MKC

Stock Analysis Report

Executive Summary

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


Snowflake Analysis

Established dividend payer with questionable track record.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: MKC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.4%

MKC

-0.6%

US Food

-1.3%

US Market


1 Year Return

42.3%

MKC

15.0%

US Food

22.0%

US Market

Return vs Industry: MKC exceeded the US Food industry which returned 13.9% over the past year.

Return vs Market: MKC exceeded the US Market which returned 24.6% over the past year.


Shareholder returns

MKCIndustryMarket
7 Day2.4%-0.6%-1.3%
30 Day2.6%-0.4%1.8%
90 Day8.3%7.5%9.3%
1 Year44.3%42.3%18.2%15.0%24.6%22.0%
3 Year89.5%80.1%0.8%-7.2%49.2%39.6%
5 Year164.4%141.9%45.9%28.7%77.9%58.3%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

32.49x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: MKC ($166.89) is trading above our estimate of fair value ($142.98)

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


Price To Earnings Ratio

PE vs Industry: MKC is poor value based on its PE Ratio (31.4x) compared to the Food industry average (25.4x).

PE vs Market: MKC is poor value based on its PE Ratio (31.4x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: MKC is poor value based on its PEG Ratio (6.1x)


Price to Book Ratio

PB vs Industry: MKC is overvalued based on its PB Ratio (6.4x) compared to the US Food industry average (2.1x).


Next Steps

Future Growth

How is McCormick forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

5.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MKC's forecast earnings growth (5.3% per year) is above the savings rate (1.7%).

Earnings vs Market: MKC's earnings (5.3% per year) are forecast to grow slower than the US market (14.7% per year).

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

Revenue vs Market: MKC's revenue (2.5% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: MKC's revenue (2.5% 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 (18.5%).


Next Steps

Past Performance

How has McCormick performed over the past 5 years?

16.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MKC has high quality earnings.

Growing Profit Margin: MKC's current net profit margins (12.9%) are lower than last year (16.8%).


Past Earnings Growth Analysis

Earnings Trend: MKC's earnings have grown by 16.1% 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 (-21.4%) over the past year, making it difficult to compare to the Food industry average (-12.1%).


Return on Equity

High ROE: Whilst MKC's Return on Equity (20.21%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is McCormick's financial position?


Financial Position Analysis

Short Term Liabilities: MKC's short term assets ($1.6B) do not cover its short term liabilities ($2.0B).

Long Term Liabilities: MKC's short term assets ($1.6B) do not cover its long term liabilities ($4.9B).


Debt to Equity History and Analysis

Debt Level: MKC's debt to equity ratio (133.9%) is considered high.

Reducing Debt: MKC's debt to equity ratio has increased from 69.4% to 133.9% over the past 5 years.

Debt Coverage: MKC's debt is not well covered by operating cash flow (19.9%).

Interest Coverage: MKC's interest payments on its debt are well covered by EBIT (5.8x coverage).


Balance Sheet

Inventory Level: MKC has a low level of unsold assets or inventory.

Debt Coverage by Assets: MKC's debt is not covered by short term assets (assets are 0.3x debt).


Next Steps

Dividend

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

1.44%

Current Dividend Yield


Dividend Yield vs Market

company1.4%marketbottom25%1.4%markettop25%3.7%industryaverage2.7%forecastin3Years1.5%

Current dividend yield vs market & industry

Notable Dividend: MKC's dividend (1.49%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: MKC's dividend (1.49%) is low compared to the top 25% of dividend payers in the US market (3.66%).


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.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (42%), MKC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MKC's dividends in 3 years are forecast to be well covered by earnings (43.3% payout ratio).


Next Steps

Management

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

4.6yrs

Average management tenure


CEO

Lawrence Kurzius (61yo)

3.9yrs

Tenure

US$14,836,426

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 ($USD14.84M) is above average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Lawrence's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

4.6yrs

Average Tenure

54yo

Average Age

Experienced Management: MKC's management team is considered experienced (4.6 years average tenure).


Board Age and Tenure

6.2yrs

Average Tenure

62yo

Average Age

Experienced Board: MKC's board of directors are considered experienced (6.2 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellUS$318,82202 Jul 19
Nneka Rimmer
EntityIndividual
Role
Senior Key Executive
Senior Vice President of Business Transformation
Shares2,070
Max PriceUS$154.02
SellUS$596,42423 May 19
Margaret Mary Preston
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,865
Max PriceUS$154.31

Ownership Breakdown

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


Management Team

  • Christina McMullen (63yo)

    VP, Controller & Chief Accounting Officer

    • Tenure: 6.3yrs
  • Lawrence Kurzius (61yo)

    Chairman

    • Tenure: 3.9yrs
    • Compensation: US$14.84m
  • Malcolm Swift (59yo)

    President of Global Flavor Solutions & McCormick International

    • Tenure: 6yrs
    • Compensation: US$2.49m
  • Lori Robinson

    Vice President of Corporate Communications

    • Tenure: 9yrs
  • Mike Smith (54yo)

    Executive VP & CFO

    • Tenure: 3.3yrs
    • Compensation: US$5.16m
  • Brendan Foley (53yo)

    President of Global Consumer & Americas

    • Tenure: 4yrs
    • Compensation: US$5.80m
  • Lisa Manzone (54yo)

    Senior Vice President of Human Relations

    • Tenure: 4.6yrs
  • Jeffery Schwartz (49yo)

    VP, General Counsel & Corporate Secretary

    • Tenure: 5.1yrs
    • Compensation: US$2.77m
  • Nneka Rimmer (47yo)

    Senior Vice President of Business Transformation

    • Tenure: 2.4yrs
  • Kasey Jenkins

    Vice President of Investor Relations


    Board Members

    • Michael Mangan (62yo)

      Lead Independent Director

      • Tenure: 13yrs
      • Compensation: US$276.28k
    • Freeman Hrabowski (68yo)

      Independent Director

      • Tenure: 23yrs
      • Compensation: US$265.03k
    • Lawrence Kurzius (61yo)

      Chairman

      • Tenure: 3.9yrs
      • Compensation: US$14.84m
    • Gary Rodkin (67yo)

      Independent Director

      • Tenure: 3yrs
      • Compensation: US$250.03k
    • Margaret Mary Preston (62yo)

      Independent Director

      • Tenure: 16.3yrs
      • Compensation: US$250.03k
    • Tony Vernon (63yo)

      Independent Director

      • Tenure: 2.7yrs
      • Compensation: US$261.28k
    • Jacques Tapiero (61yo)

      Independent Director

      • Tenure: 7.3yrs
      • Compensation: US$250.03k
    • Patricia Little (58yo)

      Independent Director

      • Tenure: 9.7yrs
      • Compensation: US$268.78k
    • Maritza Montiel (67yo)

      Independent Director

      • Tenure: 4.7yrs
      • Compensation: US$250.03k
    • Mike Conway (52yo)

      Independent Director

      • Tenure: 5yrs
      • Compensation: US$250.03k

    Company Information

    McCormick & Company, Incorporated's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: McCormick & Company, Incorporated
    • Ticker: MKC
    • Exchange: NYSE
    • Founded: 1889
    • Industry: Packaged Foods and Meats
    • Sector: Food, Beverage & Tobacco
    • Market Cap: US$22.962b
    • Shares outstanding: 132.91m
    • Website: https://www.mccormickcorporation.com

    Number of Employees


    Location

    • McCormick & Company, Incorporated
    • 24 Schilling Road
    • Suite 1
    • Hunt Valley
    • Maryland
    • 21031
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    MKCNYSE (New York Stock Exchange)YesNon-Voting Common StockUSUSDJan 1969
    MCXDB (Deutsche Boerse AG)YesNon-Voting Common StockDEEURJan 1969
    0JZSLSE (London Stock Exchange)YesNon-Voting Common StockGBUSDJan 1969
    MKCWBAG (Wiener Boerse AG)YesNon-Voting Common StockATEURJan 1969
    MKC *BMV (Bolsa Mexicana de Valores)YesNon-Voting Common StockMXMXNJan 1969
    MKC.VNYSE (New York Stock Exchange)Common StockUSUSDDec 1975

    Biography

    McCormick & Company, Incorporated manufactures, markets, and distributes spices, seasoning mixes, condiments, and other flavorful products to the food industry. The company operates in two segments, Consumer and Flavor Solutions. The Consumer segment offers spices, herbs, and seasonings, as well as desserts. This segment markets its products under the McCormick, French, Frank’s RedHot, Lawry’s, Club House, Gourmet Garden, and OLD BAY brands in the Americas; Ducros, Schwartz, Kamis, and Drogheria & Alimentari, and Vahiné brand names in Europe, the Middle East, and Africa; McCormick and DaQiao brands in China; and McCormick, Aeroplane, and Gourmet Garden brand names in Australia, as well as markets regional and ethnic brands, such as Zatarain’s, Stubb's, Thai Kitchen, and Simply Asia. It also supplies its products under the private labels. This segment serves retailers comprising grocery, mass merchandise, warehouse clubs, discount and drug stores, and e-commerce retailers directly and indirectly through distributors or wholesalers. The Flavor Solutions segment offers seasoning blends, spices and herbs, condiments, coating systems, and compound flavors to multinational food manufacturers and foodservice customers. It serves foodservice customers directly and indirectly through distributors. The company was founded in 1889 and is headquartered in Hunt Valley, Maryland. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/24 23:47
    End of Day Share Price2020/01/24 00:00
    Earnings2019/08/31
    Annual Earnings2018/11/30


    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.