NYSE:MCK

Stock Analysis Report

Executive Summary

McKesson Corporation provides pharmaceuticals and medical supplies in the United States and internationally.


Snowflake Analysis

Reasonable growth potential second-rate dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

9.3%

MCK

14.3%

US Healthcare

7.2%

US Market


1 Year Return

20.2%

MCK

1.9%

US Healthcare

-10.4%

US Market

Return vs Industry: MCK exceeded the US Healthcare industry which returned 1.9% over the past year.

Return vs Market: MCK exceeded the US Market which returned -10.4% over the past year.


Shareholder returns

MCKIndustryMarket
7 Day9.3%14.3%7.2%
30 Day-1.3%-4.7%-12.6%
90 Day-0.2%-15.0%-19.4%
1 Year21.7%20.2%3.3%1.9%-8.5%-10.4%
3 Year-2.3%-5.3%23.8%18.2%15.8%8.3%
5 Year-35.0%-37.8%28.2%19.5%35.8%21.0%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MCK ($138.02) is trading below our estimate of fair value ($350.78)

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


Price To Earnings Ratio

PE vs Industry: MCK is unprofitable, so we can't compare its PE Ratio to the Healthcare industry average.

PE vs Market: MCK is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate MCK's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: MCK is overvalued based on its PB Ratio (4x) compared to the US Healthcare industry average (2.3x).


Next Steps

Future Growth

How is McKesson forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

36.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MCK is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.7%).

Earnings vs Market: MCK is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: MCK's is expected to become profitable in the next 3 years.

Revenue vs Market: MCK's revenue (4% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: MCK's revenue (4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MCK's Return on Equity is forecast to be high in 3 years time (29.2%)


Next Steps

Past Performance

How has McKesson performed over the past 5 years?

-29.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MCK is currently unprofitable.

Growing Profit Margin: MCK is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: MCK is unprofitable, and losses have increased over the past 5 years at a rate of -29.8% per year.

Accelerating Growth: Unable to compare MCK's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: MCK is unprofitable, making it difficult to compare its past year earnings growth to the Healthcare industry (14%).


Return on Equity

High ROE: MCK has a negative Return on Equity (-8.87%), as it is currently unprofitable.


Next Steps

Financial Health

How is McKesson's financial position?


Financial Position Analysis

Short Term Liabilities: MCK's short term assets ($39.4B) do not cover its short term liabilities ($40.1B).

Long Term Liabilities: MCK's short term assets ($39.4B) exceed its long term liabilities ($13.0B).


Debt to Equity History and Analysis

Debt Level: MCK's debt to equity ratio (125.2%) is considered high.

Reducing Debt: MCK's debt to equity ratio has increased from 98% to 125.2% over the past 5 years.


Balance Sheet

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

Debt Coverage by Assets: MCK's debt is covered by short term assets (assets are 4x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: MCK has been profitable on average in the past, therefore cash runway is not a concern.

Forecast Cash Runway: MCK has been profitable on average in the past, therefore cash runway is not a concern.


Next Steps

Dividend

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

1.19%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: MCK's dividend (1.19%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.95%).

High Dividend: MCK's dividend (1.19%) is low compared to the top 25% of dividend payers in the US market (5.4%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: MCK is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: MCK's dividends in 3 years are forecast to be thoroughly covered by earnings (8.7% payout ratio).


Next Steps

Management

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

1.7yrs

Average management tenure


CEO

Brian Tyler (52yo)

0.83

Tenure

US$13,054,754

Compensation

Mr. Brian S. Tyler, Ph.D., serves as Chief Executive Officer and Director at McKesson Corporation since April 1, 2019 and also served as its President and Chief Operating Officer since August 02, 2018 unti ...


CEO Compensation Analysis

Compensation vs Market: Brian's total compensation ($USD13.05M) is about average for companies of similar size in the US market ($USD11.74M).

Compensation vs Earnings: Brian's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
Brian Tyler
CEO & Director0.83yrUS$13.05m0.0070% $1.7m
Britt Vitalone
CFO & Executive VP2.17yrsUS$9.21m0.00089% $217.5k
Lori Schechter
Executive VP5.67yrsUS$9.42m0.0074% $1.8m
Bansi Nagji
Executive VP and Chief Strategy & Business Development Officer5yrsUS$8.64m0.0027% $662.3k
Sundeep Reddy
Senior VP1.67yrsno data0.00070% $171.1k
Nancy Flores
Executive VP0.17yrno datano data
Holly Weiss
Senior Vice President of Investor Relationsno datano datano data
Pete Slone
Senior Vice President of Corporate Public Affairs4.67yrsno datano data
Tracy Faber
Executive VP & Chief Human Resources Officer0.42yrno data0.00016% $39.1k
Kirk Kaminsky
President of The US Pharmaceutical & Specialty Solutions Business0.83yrno datano data

1.7yrs

Average Tenure

52yo

Average Age

Experienced Management: MCK's management team is not considered experienced ( 1.7 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Brian Tyler
CEO & Director0.83yrUS$13.05m0.0070% $1.7m
Donald Knauss
Independent Director5.42yrsUS$299.52k0.00073% $178.4k
M. Jacobs
Independent Director21.17yrsUS$294.52kno data
Marie Knowles
Independent Director18yrsUS$312.52kno data
Edward Mueller
Independent Chairman of the Board0.83yrUS$344.59kno data
Dominic Caruso
Independent Director1.42yrsUS$214.07kno data
Susan Salka
Independent Director5.42yrsUS$314.25k0.0011% $276.2k
N. Coles
Independent Director5.83yrsUS$326.93k0.00073% $178.4k
Bradley Lerman
Independent Director1.83yrsUS$333.93kno data
Kenneth Washington
Independent Director0.67yrno datano data

3.6yrs

Average Tenure

61.5yo

Average Age

Experienced Board: MCK's board of directors are considered experienced (3.6 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.


Top Shareholders

Company Information

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


Key Information

  • Name: McKesson Corporation
  • Ticker: MCK
  • Exchange: NYSE
  • Founded: 1833
  • Industry: Health Care Distributors
  • Sector: Healthcare
  • Market Cap: US$24.441b
  • Shares outstanding: 177.08m
  • Website: https://www.mckesson.com

Number of Employees


Location

  • McKesson Corporation
  • 6555 State Highway 161
  • Irving
  • Texas
  • 75039
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MCKNYSE (New York Stock Exchange)YesCommon StockUSUSDNov 1994
MCKDB (Deutsche Boerse AG)YesCommon StockDEEURNov 1994
MCK *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNNov 1994
0JZULSE (London Stock Exchange)YesCommon StockGBUSDNov 1994
M1CK34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 4 REPR 1 COMBRBRLJan 2020

Biography

McKesson Corporation provides pharmaceuticals and medical supplies in the United States and internationally. It operates through three segments: U.S. Pharmaceutical and Specialty Solutions, European Pharmaceutical Solutions, and Medical-Surgical Solutions. The company distributes branded, generic, specialty, biosimilar, and over-the-counter pharmaceutical drugs, as well as other healthcare-related products; and offers practice management, technology, clinical support, and business solutions to community-based oncology and other specialty practices, as well as solutions for life sciences companies. It also provides financial, operational, and clinical solutions to pharmacies; and consulting, outsourcing, and other services. In addition, the company provides distribution and services to wholesale, institutional, and retail customers and serves patients and consumers in 13 European countries through its own pharmacies and participating pharmacies; and medical-surgical supply distribution, logistics, and other services to healthcare providers. Further, it provides automation solutions to its retail and hospital customers; health information exchange solutions that streamline clinical and administrative communication; and innovative technologies that support retail pharmacies and manufacturers. The company has a strategic collaboration with Aetion, Inc. to advance cancer research with real-world data. McKesson Corporation was founded in 1833 and is headquartered in Irving, Texas. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/31 00:33
End of Day Share Price2020/03/30 00:00
Earnings2019/12/31
Annual Earnings2019/03/31


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.