About McDonald's Corporation
McDonald's Corporation owns, operates, and franchises restaurants under the McDonald's brand in the United States and internationally. It offers food and beverages, including hamburgers and cheeseburgers, various chicken sandwiches, fries, shakes, frozen desserts, sundaes, soft serve cones, cookies, pies, soft drinks, coffee, and other beverages; and full or limited breakfast, as well as sells various other products during limited-time promotions. The company owns and operates franchised restaurants under various structures, including conventional franchise, developmental license, or affiliate. McDonald's Corporation was founded in 1940 and is based in Chicago, Illinois.
McDonald's Corporation (MCD) is a Consumer Cyclical company in the Restaurants industry with a market capitalisation of $178.7B. The stock trades at 20.53x trailing earnings and yields 2.95%.
- Sector
- Consumer Cyclical
- Industry
- Restaurants
- Market cap
- $178.7B
- P/E ratio
- 20.53
- Forward P/E
- 18.07
- EPS (TTM)
- $12.30
- Revenue (TTM)
- $27.7B
- Free cash flow
- $6.3B
- Profit margin
- 31.7%
- Dividend yield
- 2.95%
- Beta
- 0.41
- Shares outstanding
- 707.6M
Financial health: Fair5.5/10
5 strengths, 4 concerns. Weakest points: net debt vs cash flow, current ratio, return on equity and 1 more.
- Debt to equity: -22.72 (Strong, benchmark < 0.5) — Debt of -22.72x equity is conservative against the 0.5x benchmark. It has improved over the last 4 years.
- Net debt vs cash flow: 5.6y (Concern, benchmark < 4 years) — Net debt of $39.9B is 5.6x annual free cash flow — about 6 years of cash flow to repay.
- Current ratio: 0.95 (Concern, benchmark > 1.5) — Short-term assets cover only 0.95x short-term liabilities — below 1.0, meaning bills due this year exceed the assets on hand to pay them. It has deteriorated over the last 4 years.
- Return on equity: -478.1% (Concern, benchmark > 15%) — Earns -478.1% on shareholder equity, well short of the > 15% mark.
- Gross margin: 57.4% (Strong, benchmark > 40%) — Keeps 57.4% of revenue after the direct cost of sales, comfortably past the > 40% mark.
- Net margin: 31.7% (Strong, benchmark > 10%) — Turns 31.7% of revenue into profit, comfortably past the > 10% mark.
- Free cash flow: $7.2B (Strong, benchmark positive) — Generated $7.2B of free cash flow after capital spending. It has improved over the last 4 years.
- Revenue growth: 3.7% (Watch, benchmark > 10%) — Revenue changed 3.7% year on year, short of the > 10% mark.
- Earnings growth: 5.7% (Watch, benchmark > 10%) — Earnings changed 5.7% year on year, short of the > 10% mark.
- PEG ratio: 2.18 (Concern, benchmark < 1) — At 2.18, the price looks expensive relative to expected growth — Lynch treated 1.0 as fair value.
- Payout ratio: 59.7% (Strong, benchmark < 60%) — Pays out 59.7% of earnings as dividends, leaving room to keep paying.