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McCormick & Company, Incorporated (MKC)

Company Dividend Discount ModelIndustry: Packaged FoodsSector: Consumer Defensive

Valuation Snapshot

Stable Growth$37.14 - $63.74$48.63
Multi-Stage$42.76 - $46.70$44.69
Blended Fair Value$46.66
Current Price$70.37
Upside-33.69%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS8.34%8.89%1.671.551.471.351.221.121.010.880.810.76
YoY Growth--7.77%5.50%9.19%10.06%9.23%10.53%15.07%9.09%6.30%6.50%
Dividend Yield--2.03%2.26%1.98%1.42%1.45%1.53%1.49%1.65%1.64%1.63%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)778.00
(-) Cash Dividends Paid (M)474.90
(=) Cash Retained (M)303.10
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)155.6097.2558.35
Cash Retained (M)303.10303.10303.10
(-) Cash Required (M)-155.60-97.25-58.35
(=) Excess Retained (M)147.50205.85244.75
(/) Shares Outstanding (M)269.48269.48269.48
(=) Excess Retained per Share0.550.760.91
LTM Dividend per Share1.761.761.76
(+) Excess Retained per Share0.550.760.91
(=) Adjusted Dividend2.312.532.67
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate2.71%3.71%4.71%
Fair Value$37.14$48.63$63.74
Upside / Downside-47.22%-30.89%-9.42%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)778.00806.87836.81867.86900.07933.47961.47
Payout Ratio61.04%66.83%72.62%78.42%84.21%90.00%92.50%
Projected Dividends (M)474.90539.25607.73680.55757.93840.12889.36

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate2.71%3.71%4.71%
Year 1 PV (M)489.52494.28499.05
Year 2 PV (M)500.80510.60520.49
Year 3 PV (M)509.08524.09539.40
Year 4 PV (M)514.67535.01555.95
Year 5 PV (M)517.87543.57570.29
PV of Terminal Value (M)8,990.179,436.429,900.21
Equity Value (M)11,522.1012,043.9812,585.39
Shares Outstanding (M)269.48269.48269.48
Fair Value$42.76$44.69$46.70
Upside / Downside-39.24%-36.49%-33.63%

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