NYSE:MCD
$63.49
(2/9 1:05PM)
+0.9%
| Open | $63.15 |
Mkt Cap | $67.9 Billion |
| High | $63.91 |
52Wk High | $65.75 |
| Low | $62.63 |
52Wk Low | $50.44 |
| Volume | 6.3 Million |
Avg Vol 10D | 9.4 Million |
Ockham's Rating/Recommendation Summary
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MCD Revenue
Cash earnings is the most important factor in our analysis, but it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, MCD the high and low end of the Price to Sales per share ratios are 2.98x and 2.08x respectively.
Notice that MCD's current Price to Sales per share ratio is 3.01x, which is significantly above its historical average. This places MCD at the upper end of its historical range relative to sales per share and makes it difficult to suggest an attractive price outlook. At current sales per share levels, we would need to see a decline in the Price to Sales ratio of 18% merely to return MCD to its historical average.
MCD Cash Earnings
As the old saying goes, "Cash is King!" We look at reported Cash Earnings, but the main emphasis of our analysis involves stripping out non-cash events such as depreciation from our cash earnings analysis. This helps us view the cash flows more clearly. Nevertheless, an analysis of Cash Earnings (both reported and otherwise) is absolutely pivotal to assessing a company's value, and currently MCD is below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for MCD, the current level of Cash Earnings compared to its historical levels helps identify where MCD is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 15.13 and a historical low Cash Earnings per share ratio of 10.40, an investor can relate where value becomes optimal.
At its current price of $63.37, the Price to Cash Earnings ratio of 12.45 per share for MCD is relatively attractive. At current profitability levels, a drop in share price would only improve our future expectations. Again, Cash Earnings is an incredibly valuable metric, and management at MCD must continue on its generation to improve our overall outlook for the stock.
MCD Dividends
A positive Ockham rating does not require a company to pay out an inviting dividend or a dividend at all. However, we believe dividends provide a useful measure of a company's inherent expectations.
Comparable to our analysis of Sales and Cash Earnings per share, we examine dividend yields from MCD against the historic high and low levels over an available data range. Because MCD has an established history of paying a dividend to shareholders, there is value in comparing recent dividends to historical dividends. In MCD’s case, the estimated annual dividend is $2.20 producing a current dividend yield of 3.47%. The highest dividend yield from MCD in recent history was 4.36% while the lowest dividend yield was 0.65%. MCD’s current dividend yield is therefore significantly higher than its median dividend yield historically. In fact, the current yield is 38.52% above the median which weighs very positively on our analysis of MCD.
Earnings Discussion for McDonald's Corporation on Power Lunch
Earnings or profits are the most key fundamental factor that an investor to be aware of for any stock. We noticed Power Lunch discussed earnings on MCD.
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Learn About RazorWire?Squawk On The Street: MCD is Among Most Active Stocks in the News Today
Something important is going on with MCD today, as it is getting a lot of attention on business television and influential blogs.
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Learn About RazorWire?Sentiment and MCD Discussed on Squawk On The Street
It is always benefitial to understand the market's sentiment for a particular stock, and Squawk On The Street talked about some aspects of sentiment for MCD recently.
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Learn About RazorWire?There is Significant News on MCD:Among the Twenty Most Active Stocks in the News
Something important is going on with MCD today, as it is getting a lot of attention on business television and influential blogs.
Premium Content - please sign up for Ockham PREMIUM to gain full access and to see what Squawk On The Street said about MCDONALD'S CORP.
Learn About RazorWire?Delevoping Economies and Where MCD Fits In on Squawk On The Street
There is no doubt that the emerging markets are where the growth is right now. The latest news mention of MCD on Squawk On The Street was in relation to emerging markets.
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Learn About RazorWire?MCD in Developing Markets on Squawk Box
McDonald's Corporation and an emerging market growth strategy were discussed recently on MCD.
Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. The Ockham valuation currently has a Fairly Valued stance on MCD because it trades within the price range that we would expect given current market conditions and fundamentals. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, McDonald's Corporation has actually sunk a bit in comparison to the others.
“… MCDONALD'S out with same-store sales up 2. 6% on a global basis, better than the 1. 4% the street was indicating. Also, coca-cola out with earnings, 66 cents a share, right in ... …”
Stocks to Watch: MCD Heavily Covered on Imus In The Morning
We are observing a lot of attention being paid to MCD in the news, so if you hold the stock you may want to take a look at what is going on.
When taking into account the amount of news coverage each stock normally sees as a percentage of the total, McDonald's Corporation has actually sunk a bit in comparison to the others. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. The Ockham valuation currently has a Fairly Valued stance on MCD because it trades within the price range that we would expect given current market conditions and fundamentals.
“… In the meantime, MCDONALD'S just releasing sales figures for january. Global same-store sales up 2. 6%, here in the u. S. …”
There is Significant News on MCD:Among the Twenty Most Active Stocks in the News
We are observing a lot of attention being paid to MCD in the news, so if you hold the stock you may want to take a look at what is going on.
When taking into account the amount of news coverage each stock normally sees as a percentage of the total, McDonald's Corporation has actually sunk a bit in comparison to the others. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. The Ockham valuation currently has a Fairly Valued stance on MCD because it trades within the price range that we would expect given current market conditions and fundamentals.
“… I'd also say there's something concerning here in japan just announced MCDONALD'S closing 434 stores, over 10% of their store base. …”
There is Significant News on MCD:Among the Twenty Most Active Stocks in the News
We are observing a lot of attention being paid to MCD in the news, so if you hold the stock you may want to take a look at what is going on.
McDonald's Corporation receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. We noticed recently that in comparison to all other stocks we analyze in the news; MCD has received less coverage from the financial media in business television and blogs. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey.
“… Does MCDONALD'S do better when the economy does worse or do better when the economy does better? > > I think they're less volatile. …”
MCD's Sales and Growth in Focus on Squawk Box
Sales growth is an absolutely essential metric to understand when researching a stock. Today, MCD's sales growth was the topic on Squawk Box.
As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, MCD has been less covered in the news compared to the rest of our universe of stocks. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on MCD. The Motley Fool CAPS data suggests that investors believe McDonald's Corporation will beat the market in the foreseeable future.
“… MCDONALD'S coming out with january 2010 sales figures minutes ago. On the "squawk" news line, matthew. Earnings in line but revenue above. What does that tell you going ... …”