McCormick & Company, Incorporated
McCormick & Company, Incorporated Fundamental Analysis
McCormick & Company, Incorporated (MKC-V) shows strong financial fundamentals with a PE ratio of 8.01, profit margin of 23.20%, and ROE of 27.41%. The company generates $7.1B in annual revenue with weak year-over-year growth of 1.73%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 58.1/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze MKC-V's fundamental strength across five key dimensions:
Efficiency Score
ExcellentMKC-V demonstrates superior asset utilization.
Valuation Score
ExcellentMKC-V trades at attractive valuation levels.
Growth Score
WeakMKC-V faces weak or negative growth trends.
Financial Health Score
ModerateMKC-V shows balanced financial health with some risks.
Profitability Score
ExcellentMKC-V achieves industry-leading margins.
Key Financial Metrics
Is MKC-V Expensive or Cheap?
P/E Ratio
MKC-V trades at 8.01 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, MKC-V's PEG of 0.07 indicates potential undervaluation.
Price to Book
The market values McCormick & Company, Incorporated at 1.89 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 6.29 times EBITDA. This is generally considered low.
How Well Does MKC-V Make Money?
Net Profit Margin
For every $100 in sales, McCormick & Company, Incorporated keeps $23.20 as profit after all expenses.
Operating Margin
Core operations generate 15.39 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $27.41 in profit for every $100 of shareholder equity.
ROA
McCormick & Company, Incorporated generates $10.09 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
McCormick & Company, Incorporated produces operating cash flow of $897.03M, showing steady but balanced cash generation.
Free Cash Flow
McCormick & Company, Incorporated generates strong free cash flow of $817.98M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $3.05 in free cash annually.
FCF Yield
MKC-V converts 6.20% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
8.01
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.07
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.89
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.86
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.70
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.76
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.27
vs 25 benchmark
ROA
Return on assets percentage
0.10
vs 25 benchmark
ROCE
Return on capital employed
0.08
vs 25 benchmark
How MKC-V Stacks Against Its Sector Peers
| Metric | MKC-V Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 8.01 | 22.36 | Better (Cheaper) |
| ROE | 27.41% | 1238.00% | Weak |
| Net Margin | 23.20% | -5096.00% (disorted) | Strong |
| Debt/Equity | 0.70 | 1.23 | Strong (Low Leverage) |
| Current Ratio | 0.76 | 2.47 | Weak Liquidity |
| ROA | 10.09% | -191998.00% (disorted) | Strong |
MKC-V outperforms its industry in 4 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews McCormick & Company, Incorporated's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
21.17%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthEPS CAGR
4.79%
Industry Style: Defensive, Dividend, Low Volatility
GrowingFCF CAGR
-8.32%
Industry Style: Defensive, Dividend, Low Volatility
Declining