NYSE:MCK

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Excellent balance sheet average 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


Market Performance


7 Day Return

6.3%

MCK

3.9%

US Healthcare

0.07%

US Market


1 Year Return

15.4%

MCK

-6.7%

US Healthcare

8.9%

US Market

Return vs Industry: MCK exceeded the US Healthcare industry which returned -6.7% over the past year.

Return vs Market: MCK exceeded the US Market which returned 8.9% over the past year.


Shareholder returns

MCKIndustryMarket
7 Day6.3%3.9%0.07%
30 Day0.07%3.5%-0.3%
90 Day4.7%-0.05%-1.6%
1 Year16.8%15.4%-5.1%-6.7%11.3%8.9%
3 Year-4.5%-7.3%37.0%30.6%46.3%36.8%
5 Year-23.9%-27.0%61.3%50.4%62.1%44.3%

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?

38.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MCK ($146.92) is trading below our estimate of fair value ($239.42)

Significantly Below Fair Value: MCK is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: MCK is poor value based on its PE Ratio (47.1x) compared to the Healthcare industry average (21x).

PE vs Market: MCK is poor value based on its PE Ratio (47.1x) compared to the US market (17.8x).


Price to Earnings Growth Ratio

PEG Ratio: MCK is poor value based on its PEG Ratio (4x)


Price to Book Ratio

PB vs Industry: MCK is overvalued based on its PB Ratio (3.5x) compared to the US Healthcare industry average (2.5x).


Next Steps

Future Growth

How is McKesson forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

11.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MCK's forecast earnings growth (11.8% per year) is above the savings rate (2.7%).

Earnings vs Market: MCK's earnings (11.8% per year) are forecast to grow slower than the US market (14.5% per year).

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

Revenue vs Market: MCK's revenue (3.9% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: MCK's revenue (3.9% 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 (26.9%)


Next Steps

Past Performance

How has McKesson performed over the past 5 years?

-12.4%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: MCK's earnings have declined by -12.4% per year over the past 5 years.

Accelerating Growth: MCK has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: MCK has become profitable in the last year, making it difficult to compare its past year earnings growth to the Healthcare industry (5.6%).


Return on Equity

High ROE: MCK's Return on Equity (8.6%) is considered low.


Return on Assets

ROA vs Industry: MCK's Return on Assets is below or equal to the Healthcare industry average last year.


Return on Capital Employed

ROCE Improving: MCK's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is McKesson's financial position?


Financial Position Analysis

Short Term Liabilities: MCK's short term assets ($38.4B) exceeds its short term liabilities ($38.0B)

Long Term Liabilities: MCK's short term assets (38.4B) exceeds its long term liabilities (14.3B)


Debt to Equity History and Analysis

Debt Level: MCK's debt to equity ratio (81%) is considered high

Reducing Debt: MCK's debt to equity ratio has reduced from 99.2% to 81% over the past 5 years.

Debt Coverage: MCK's debt is well covered by operating cash flow (65.8%).

Interest Coverage: MCK's interest payments on its debt are well covered by EBIT (14.9x coverage).


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 5.011470x debt).


Next Steps

Dividend

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

1.12%

Current Dividend Yield


Dividend Yield vs Market

company1.1%marketbottom25%1.4%markettop25%3.7%industryaverage1.6%forecastin3Years1.1%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: MCK's dividend (1.12%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: MCK's dividend (1.12%) is low compared to the top 25% of dividend payers in the US market (3.68%).

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: With its reasonably low payout ratio (50%), MCK's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MCK's dividends in 3 years are forecast to be thoroughly covered by earnings (9.7% payout ratio).


Next Steps

Management

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

3.0yrs

Average management tenure


CEO

Brian Tyler (52yo)

0.5yrs

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. He  ...


CEO Compensation Analysis

Compensation vs. Market: Brian has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the US market.

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


Management Age and Tenure

3.0yrs

Average Tenure

53yo

Average Age

Experienced Management: MCK's management team is considered experienced (3 years average tenure).


Board Age and Tenure

3.3yrs

Average Tenure

61.5yo

Average Age

Experienced Board: MCK's board of directors are considered experienced (3.3 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.


Ownership Breakdown


Management Team

  • Lori Schechter (57yo)

    Executive VP

    • Tenure: 5.3yrs
    • Compensation: US$9.42m
  • Kirk Kaminsky

    President of The US Pharmaceutical & Specialty Solutions Business

    • Tenure: 0.5yrs
  • Brian Tyler (52yo)

    CEO & Director

    • Tenure: 0.5yrs
    • Compensation: US$13.05m
  • Bansi Nagji (54yo)

    Executive VP and Chief Strategy & Business Development Officer

    • Tenure: 4.7yrs
    • Compensation: US$8.64m
  • Kathy McElligott (63yo)

    Chief Technology Officer

    • Tenure: 4.3yrs
  • Pete Slone

    Senior Vice President of Corporate Public Affairs

    • Tenure: 4.3yrs
  • Britt Vitalone (50yo)

    CFO & Executive VP

    • Tenure: 1.8yrs
    • Compensation: US$9.21m
  • Sundeep Reddy (45yo)

    Senior VP

    • Tenure: 1.3yrs
  • Tracy Faber

    Executive VP & Chief Human Resources Officer

    • Tenure: 0yrs
  • Holly Weiss

    Senior Vice President of Investor Relations

    • Tenure: 0yrs

Board Members

  • Don Knauss (68yo)

    Independent Director

    • Tenure: 5yrs
    • Compensation: US$299.52k
  • Chris Jacobs (68yo)

    Independent Director

    • Tenure: 20.8yrs
    • Compensation: US$294.52k
  • Marie Knowles (73yo)

    Independent Director

    • Tenure: 17.6yrs
    • Compensation: US$312.52k
  • Ed Mueller (72yo)

    Independent Chairman of the Board

    • Tenure: 0.5yrs
    • Compensation: US$344.59k
  • Dominic Caruso (61yo)

    Independent Director

    • Tenure: 1.1yrs
    • Compensation: US$214.07k
  • Nowakowski Salka (54yo)

    Independent Director

    • Tenure: 5yrs
    • Compensation: US$314.25k
  • Tony Coles (59yo)

    Independent Director

    • Tenure: 5.5yrs
    • Compensation: US$326.93k
  • Brian Tyler (52yo)

    CEO & Director

    • Tenure: 0.5yrs
    • Compensation: US$13.05m
  • Brad Lerman (62yo)

    Independent Director

    • Tenure: 1.5yrs
    • Compensation: US$333.93k
  • Ken Washington (59yo)

    Independent Director

    • Tenure: 0.3yrs

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$27.166b
  • Shares outstanding: 184.90m
  • 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

Biography

McKesson Corporation provides pharmaceuticals and medical supplies in the United States and internationally. It operates in three segments: U.S. Pharmaceutical and Specialty Solutions, European Pharmaceuti ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/22 23:40
End of Day Share Price2019/10/22 00:00
Earnings2019/06/30
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.