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$195.11 - $387.87$270.54
Multi-Stage$252.33 - $276.41$264.14
Blended Fair Value$267.34
Current Price$292.17
Upside-8.50%
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$195.11$270.54$387.87
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)5,308.355,360.285,412.20
Year 2 PV (M)5,522.375,630.935,740.55
Year 3 PV (M)5,705.605,874.676,047.04
Year 4 PV (M)5,860.406,093.086,332.61
Year 5 PV (M)5,989.016,287.706,598.18
PV of Terminal Value (M)152,751.56160,369.63168,288.67
Equity Value (M)181,137.30189,616.28198,419.25
Shares Outstanding (M)717.85717.85717.85
Fair Value$252.33$264.14$276.41
Upside / Downside-13.63%-9.59%-5.39%

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