McDonald’s (MCD) share price forecast & analysis

Learn how to easily invest in McDonald's shares.

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McDonald's overview

McDonald's Corporation operates and franchises McDonald's restaurants in the United States and internationally. Its restaurants offer various food products and beverages, as well as breakfast menu. As of December 31, 2020, the company operated 39,198 restaurants. McDonald's Corporation was founded in 1940 and is based in Chicago, Illinois.

McDonald's shares at a glance

Information last updated 2022-01-22.
52-week rangeUS$198.5637 - US$271.15
50-day moving average US$259.0578
200-day moving average US$242.9475
Target priceUS$281.41
PE ratio 26.2464
Dividend yield US$5.16 (2.18%)
Earnings per share (TTM) US$9.7

Price chart for McDonald's (NYSE:MCD)

The advanced price chart for MCD displays price movement in different formats like candle sticks, bars, lines and few more. On top of this you can map many technical indicators like Moving average, Bollinger bands and Moving average convergence divergence (MACD). You have options to view these over different time frames as well as compare MCD with any other cryptocurrency of your choice.

Is McDonald's under- or over-valued?

Valuing McDonald's stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of McDonald's's overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.

McDonald's's P/E ratio

McDonald's's current share price divided by its per-share earnings (EPS) over a 12-month period gives a "trailing price/earnings ratio" of roughly 26x. In other words, McDonald's shares trade at around 26x recent earnings.

That's comparable to, say, the trailing 12-month P/E ratio for the NASDAQ 100 at the end of 2019 (27.29).

McDonald's's PEG ratio

McDonald's's "price/earnings-to-growth ratio" can be calculated by dividing its P/E ratio by its growth – to give 2.0459. A low ratio can be interpreted as meaning the shares offer better value, while a higher ratio can be interpreted as meaning the shares offer worse value.

The PEG ratio provides a broader view than just the P/E ratio, as it gives more insight into McDonald's's future profitability. By accounting for growth, it could also help you if you're comparing the share prices of multiple high-growth companies.

McDonald's's EBITDA

McDonald's's EBITDA (earnings before interest, taxes, depreciation and amortisation) is US$11.2 billion (£8.4 billion).

The EBITDA is a measure of a McDonald's's overall financial performance and is widely used to measure a its profitability.

McDonald's share dividends

60%

Dividend payout ratio: 60% of net profits

Recently McDonald's has paid out, on average, around 60% of net profits as dividends. That has enabled analysts to estimate a "forward annual dividend yield" of 2.18% of the current stock value. This means that over a year, based on recent payouts (which are sadly no guarantee of future payouts), McDonald's shareholders could enjoy a 2.18% return on their shares, in the form of dividend payments. In McDonald's's case, that would currently equate to about $5.16 per share.

McDonald's's payout ratio would broadly be considered high, and as such this stock could appeal to those looking to generate an income. Bear in mind however that companies should normally also look to re-invest a decent amount of net profits to ensure future growth.

McDonald's's most recent dividend payout was on 14 December 2021. The latest dividend was paid out to all shareholders who bought their shares by 29 November 2021 (the "ex-dividend date").

Have McDonald's's shares ever split?

McDonald's's shares were split on a 2:1 basis on 7 March 1999. So if you had owned 1 share the day before the split, the next day you would own 2 shares. This wouldn't directly have changed the overall worth of your McDonald's shares – just the quantity. However, indirectly, the new 50% lower share price could have impacted the market appetite for McDonald's shares which in turn could have impacted McDonald's's share price.

McDonald's share price volatility

Over the last 12 months, McDonald's's shares have ranged in value from as little as US$198.5637 up to US$271.15. A popular way to gauge a stock's volatility is its "beta".

MCD.US volatility(beta: 0.6)Avg. volatility(beta: 1.00)LowHigh

Beta measures a share's volatility in relation to the market. The market (NYSE average) beta is 1, while McDonald's's is 0.5971. This would suggest that McDonald's's shares are less volatile than average (for this exchange).

McDonald's financials

Revenue TTM US$22.5 billion
Operating margin TTM 41.61%
Gross profit TTM US$9.8 billion
Return on assets TTM 11.33%
Return on equity TTM 0%
Profit margin 32.33%
Book value -8.966
Market capitalisation US$190.2 billion

TTM: trailing 12 months

Environmental, social, and governance (ESG) summary

McDonald's Corporation was last rated for ESG on: 2019-01-01.

Total ESG score 22.47
Total ESG percentile 35.48
Environmental score 2.17
Environmental score percentile 2
Social score 14.15
Social score percentile 2
Governance score 5.15
Governance score percentile 2
Level of controversy 3

McDonald's's environmental, social and governance track record

Environmental, social and governance (known as ESG) criteria are a set of three factors used to measure the sustainability and social impact of companies like McDonald's.

When it comes to ESG scores, lower is better, and lower scores are generally associated with lower risk for would-be investors.

McDonald's's total ESG risk score

Total ESG risk: 22.47

Socially conscious investors use ESG scores to screen how an investment aligns with their worldview, and McDonald's's overall score of 22.47 (as at 12/31/2018) is pretty good – landing it in it in the 35th percentile of companies rated in the same sector.

ESG scores are increasingly used to estimate the level of risk a company like McDonald's is exposed to within the areas of "environmental" (carbon footprint, resource use etc.), "social" (health and safety, human rights etc.), and "governance" (anti-corruption, tax transparency etc.).

McDonald's's environmental score

Environmental score: 2.17/100

McDonald's's environmental score of 2.17 puts it squarely in the 2nd percentile of companies rated in the same sector. This could suggest that McDonald's is a leader in its sector terms of its environmental impact, and exposed to a lower level of risk.

McDonald's's social score

Social score: 14.15/100

McDonald's's social score of 14.15 puts it squarely in the 2nd percentile of companies rated in the same sector. This could suggest that McDonald's is a leader in its sector when it comes to taking good care of its workforce and the communities it impacts.

McDonald's's governance score

Governance score: 5.15/100

McDonald's's governance score puts it squarely in the 2nd percentile of companies rated in the same sector. That could suggest that McDonald's is a leader in its sector when it comes to responsible management and strategy, and exposed to a lower level of risk.

McDonald's's controversy score

Controversy score: 3/5

ESG scores also evaluate any incidences of controversy that a company has been involved in. McDonald's scored a 3 out of 5 for controversy – a middle-of-the-table result reflecting that McDonald's hasn't always managed to keep its nose clean.

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