Definitive Analysis
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Definitive Analysis

Financial Statements

Ticker

Industry

Sector

McDonald's Corporation (MCD)

Company Dividend Discount ModelIndustry: RestaurantsSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$195.12 - $387.89$270.56
Multi-Stage$252.34 - $276.42$264.16
Blended Fair Value$267.36
Current Price$292.17
Upside-8.49%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS6.34%4.24%6.786.315.815.465.234.994.544.304.264.50
YoY Growth--7.44%8.75%6.37%4.42%4.77%10.01%5.40%1.01%-5.33%0.44%
Dividend Yield--2.17%2.25%2.08%2.21%2.33%3.02%2.41%2.75%3.29%3.58%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)8,415.00
(-) Cash Dividends Paid (M)5,061.00
(=) Cash Retained (M)3,354.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)1,683.001,051.88631.13
Cash Retained (M)3,354.003,354.003,354.00
(-) Cash Required (M)-1,683.00-1,051.88-631.13
(=) Excess Retained (M)1,671.002,302.132,722.88
(/) Shares Outstanding (M)717.85717.85717.85
(=) Excess Retained per Share2.333.213.79
LTM Dividend per Share7.057.057.05
(+) Excess Retained per Share2.333.213.79
(=) Adjusted Dividend9.3810.2610.84
WACC / Discount Rate7.15%7.15%7.15%
Growth Rate2.24%3.24%4.24%
Fair Value$195.12$270.56$387.89
Upside / Downside-33.22%-7.40%32.76%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)8,415.008,687.358,968.529,258.799,558.459,867.8210,163.85
Payout Ratio60.14%66.11%72.09%78.06%84.03%90.00%92.50%
Projected Dividends (M)5,061.005,743.566,465.017,227.148,031.838,881.049,401.56

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate7.15%7.15%7.15%
Growth Rate2.24%3.24%4.24%
Year 1 PV (M)5,308.365,360.285,412.21
Year 2 PV (M)5,522.395,630.955,740.57
Year 3 PV (M)5,705.625,874.696,047.07
Year 4 PV (M)5,860.446,093.116,332.65
Year 5 PV (M)5,989.066,287.746,598.23
PV of Terminal Value (M)152,758.60160,377.03168,296.43
Equity Value (M)181,144.47189,623.81198,427.15
Shares Outstanding (M)717.85717.85717.85
Fair Value$252.34$264.16$276.42
Upside / Downside-13.63%-9.59%-5.39%

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