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.

Rewards

Earnings are forecast to grow 5.13% per year

Pays a high and reliable dividend of 1.49%

Risk Analysis

Has a high level of debt



Snowflake Analysis

Established dividend payer with imperfect balance sheet.


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

2.0%

MKC

0.1%

US Food

0.9%

US Market


1 Year Return

29.9%

MKC

10.1%

US Food

20.0%

US Market

Return vs Industry: MKC exceeded the US Food industry which returned 10.2% over the past year.

Return vs Market: MKC exceeded the US Market which returned 20.1% over the past year.


Shareholder returns

MKCIndustryMarket
7 Day2.0%0.1%0.9%
30 Day-1.1%-0.7%1.4%
90 Day0.5%2.9%8.8%
1 Year31.7%29.9%13.1%10.1%22.5%20.0%
3 Year79.9%71.0%-0.3%-8.3%49.9%40.3%
5 Year141.9%121.3%42.8%26.2%73.2%54.1%

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?

31.48x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: MKC ($166.84) is trading above our estimate of fair value ($148.9)

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 (31.5x) compared to the Food industry average (25.5x).

PE vs Market: MKC is poor value based on its PE Ratio (31.5x) compared to the US market (18.4x).


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 (2x).


Next Steps

Future Growth

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

5.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MKC's forecast earnings growth (5.1% per year) is above the savings rate (1.7%).

Earnings vs Market: MKC's earnings (5.1% per year) are forecast to grow slower than the US market (14.6% per year).

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

Revenue vs Market: MKC's revenue (3% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: MKC's revenue (3% 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?

15.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MKC has high quality earnings.

Growing Profit Margin: MKC's current net profit margins (13.1%) are lower than last year (17.6%).


Past Earnings Growth Analysis

Earnings Trend: MKC's earnings have grown by 15.6% 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 (-24.7%) over the past year, making it difficult to compare to the Food industry average (-6.2%).


Return on Equity

High ROE: Whilst MKC's Return on Equity (20.33%) 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 ($2.2B).

Long Term Liabilities: MKC's short term assets ($1.6B) do not cover its long term liabilities ($4.8B).


Debt to Equity History and Analysis

Debt Level: MKC's debt to equity ratio (121.1%) is considered high.

Reducing Debt: MKC's debt to equity ratio has increased from 71.1% to 121.1% over the past 5 years.

Debt Coverage: MKC's debt is well covered by operating cash flow (22.6%).

Interest Coverage: MKC's interest payments on its debt are well covered by EBIT (6.4x 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 0.4x debt).


Next Steps

Dividend

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

1.49%

Current Dividend Yield


Dividend Yield vs Market

company1.5%marketbottom25%1.4%markettop25%3.7%industryaverage2.7%forecastin3Years1.6%

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 (1.44%).

High Dividend: MKC's dividend (1.49%) is low compared to the top 25% of dividend payers in the US market (3.69%).


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 (43%), 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 (44% payout ratio).


Next Steps

Management

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

4.0yrs

Average management tenure


CEO

Lawrence Kurzius (61yo)

4yrs

Tenure

US$12,769,185

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 ($USD12.77M) is about average for companies of similar size in the US market ($USD10.78M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Lawrence Kurzius
Chairman4yrsUS$12.77m0.081% $18.0m
Michael Smith
Executive VP & CFO3.4yrsUS$4.64m0.024% $5.3m
Malcolm Swift
Chief Administrative Officer and President of Global Flavor Solutions & International-EMEA0.08yrsUS$3.23m0.019% $4.2m
Jeffery Schwartz
VP, General Counsel & Corporate Secretary5.2yrsUS$2.33m0.0080% $1.8m
Brendan Foley
President of Global Consumer2.2yrsUS$3.90m0.013% $2.9m
Christina McMullen
VP, Controller & Chief Accounting Officer6.3yrsno data0.0012% $272.8k
Kasey Jenkins
Vice President of Investor Relations0yrsno datano data
Lori Robinson
Vice President of Corporate Communications9.1yrsno datano data
Lisa Manzone
Senior Vice President of Human Relations4.7yrsno data0.0089% $2.0m
Nneka Rimmer
Senior Vice President of Business Transformation2.5yrsno data0.0097% $2.2m

4.0yrs

Average Tenure

54yo

Average Age

Experienced Management: MKC's management team is considered experienced (4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Lawrence Kurzius
Chairman4yrsUS$12.77m0.081% $18.0m
Michael Mangan
Lead Independent Director13.1yrsUS$275.07k0.014% $3.2m
Freeman Hrabowski
Independent Director23.1yrsUS$265.07k0.038% $8.3m
Gary Rodkin
Independent Director3.1yrsUS$250.07k0.0017% $374.8k
Margaret Mary Preston
Independent Director16.4yrsUS$250.07k0.038% $8.4m
William Vernon
Independent Director2.8yrsUS$265.07k0.0016% $350.4k
Jacques Tapiero
Independent Director7.4yrsUS$250.07k0.0075% $1.7m
Patricia Little
Independent Director9.8yrsUS$270.07k0.0083% $1.9m
Maritza Montiel
Independent Director4.8yrsUS$250.07k0.0029% $649.8k
Michael Conway
Independent Director5.1yrsUS$250.07k0.0034% $751.8k

6.3yrs

Average Tenure

62yo

Average Age

Experienced Board: MKC's board of directors are considered experienced (6.3 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.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

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$22.177b
  • 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
M1KC34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 4 REPR 1 COMBRBRLJan 2020

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, Gourmet Garden, Club House, 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 Analysis2020/02/17 23:42
End of Day Share Price2020/02/14 00:00
Earnings2019/11/30
Annual Earnings2019/11/30


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.