McDonald’s Corp (MCD): Score-Card Analysis

This analysis attributes an Overall Score to a company by analyzing several aspects that I consider to be among the most important.

In summary, a company to have an overall score close to 100% must have the following characteristics:

  • Report high growth rates in the last 3 years (and in the last quarter) in terms of Revenue, Gross Profit, Operating Income and Net Income. Furthermore, it must operate with high and improving margins in recent years.
  • Analysts expect Earnings Per Share (EPS) and revenues to grow in the short term (in the next quarter) and in the medium to long term (in the next 5 years). Moreover, they expect the company to be undervalued at current prices and in the last quarter their EPS expectations must have been beaten with a consequent rise in share prices.
  • The stock price of the company must have outperformed the S&P 500 index and in the last 3 months the Hedge Funds and Insiders bought shares in the company.

The overall score ranges from -100% (if the characteristics listed above are all very negative) to +100% and it is unlikely that there will be a company with a +100% score because the requirements for achieving this score are very high, however a score higher than +40% can be considered good.

This analysis alone is not enough to decide whether or not to invest in a company because it does not provide indications on the timing of entry, but it is a good starting point.


McDonald’s Corp (MCD)


Summary

  • Overall Score: +35,2%
  • Revenue in decline over the past 3 years (-18%) but net margin improving to 31.8% (+ 60.8% in the last 3 years)
  • Hedge Funds and Insiders have reduced their positions in the last 3 months
  • Analysts expectations
    • expected EPS growth next 5 years + 6.7%
    • 9.2% undervaluation
    • expected modest growth in the next quarter, revenues + 2.4% and EPS + 5.2%

Full description

McDonald’s Corporation is an American fast food company, founded in 1940 as a restaurant operated by Richard and Maurice McDonald, in San Bernardino, California, United States. They rechristened their business as a hamburger stand, and later turned the company into a franchise, with the Golden Arches logo being introduced in 1953 at a location in Phoenix, Arizona.

The overall score of MCD is 35% .

In the last 6 months, MCD has overperformed the S&P500 index by 11,6% and analysts believe the company is undervalued by 9,2% .

In the last quarter, the company reported revenues of 5341,3 million, down by -0,2% compared to the same quarter 12 months earlier. Revenue TTM (Trailing-12-Months) are equal to 20829,3 million, down by -18,0% in the last 3 years.

MCD reported an operating income of 2273,9 million in the last quarter, an improvement of 0,5% compared to the same quarter 12 months earlier, also reporting an improvement of 0,7% in the operating margin. Considering the sum of the last four quarters (TTM), MCD reports an operating income of 8785,1 Million , a growth of 22,9% compared to three years ago and an improvement of 50,0% in the operating margin.

MCD reported a net income of 1516,9 million in the last quarter, an improvement of 1,4% compared to the same quarter 12 months earlier, also reporting an improvement of 1,6% in the net margin. The TTM net income is 5967,9 million , a growth of 31,8% compared to three years ago and the net margin has improved by 60,8% .

In the next quarter, analysts expect growth in EPS (Earnings Per Share) of 5,2% and a growth in revenue of 2,4% . Furthermore, they expect an annual growth of MCD EPS by 6,7% for the next 5 years.

In the last quarter, MCD reported worse EPS than analysts’ expectations and the stock price reacted by increasing by 0,5% .

Finally, in the last 3 months the Hedge Funds have decreased their positions by 183k shares. The Insiders have sold shares worth $5.76M .


Sources & additional info

*The comparison with the S&P 500 index is visible inside the graph.
*Data updated to the last quarterly report available
*Data in Millions of Dollars
*Data from zacks.com, tipranks.com, reuters.com, finance.yahoo.com
*Company information from wikipedia.com


This analysis gives you a general idea of whether a company is good or not, but you may also be interested in finding potential entry points, so I am waiting for you here to know about the best chart patterns of today.


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DISCLAIMER: The information in this blog post represents my own analysis/opinions and does not contain a recommendation for any particular security or investment.