McDonalds Corp (MCD) stock analysis

P/E against its history

Not enough price and earnings history to compare.

P/E against the industry

Needs positive earnings and enough profitable companies in the industry.

EV/EBITDA below its 5-year median

McDonalds's EV/EBITDA of 2.9 is below its 5-year median of 3.1.

P/S below the industry

McDonalds's price-to-sales of 0.00 is below the Eating and Drinking Places median of 0.73 (book value is negative, so we use sales).

Trading below fair value

The share price of $274.80 is below our fair value estimate of $141854350.23.

Margin of safety over 20%

The price is 100.0% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 5.1% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 12.8% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 6.9% over the last twelve months, against a 5-year average of 12.6% a year.

Growing slower than the industry

Revenue grew 5.8% over the last twelve months; the Eating and Drinking Places median is 5.9%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

This company does not report gross profit.

Return on equity

Needs positive equity and five years of results.

Return on capital over 10%

Return on invested capital was 27.5%, above the 10% that usually covers the cost of capital.

Return on equity against the industry

Needs positive equity.

Earnings grew over 5 years

Net income grew 12.6% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 32.4% over the last twelve months, against a 5-year average of 31.2%.

Net margin above the industry

McDonalds's net margin of 32.4% is above the Eating and Drinking Places median of 1.9%.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 27.5% of total debt.

Interest well covered

Operating income covers interest expense 8.0 times.

Short-term assets cover short-term debts

Current assets are 1.23 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.87; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

McDonalds paid dividends worth 2.7% of the share price over the last twelve months.

Yield below Treasuries

The 2.7% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; McDonalds yields 2.7%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 58.7% of net income.

Covered by free cash flow

Dividends take 70.4% of free cash flow.