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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Mccormick & Company, Incorporated (XNYS:MKC) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
MKC
Name:
MCCORMICK & COMPANY, INCORPORATED (XNYS:MKC)
Sector:
- 25800.00K
Industry:
Packaged Foods
CEO:
Mr. Lawrence Kurzius
Total Employees:
14,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -262.39% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF MCCORMICK & COMPANY, INCORPORATED(MKC) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND PACKAGED FOODS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
83.05
One Month Price Target:
$83.28
Six Month Price Target :
$84.44
Likely Price in One Year's Time:
Ticker:
$85.83
Likely Trading Range Today Under (Normal Volatility)
$82.81
Price Upper limit ($) :
$83.31
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$80.02
This week:
$76.26
This month :
$69.48
Other Primary facts
Market Cap:
22.28B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
268.30M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.23%
-10.92%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$97.14
$90.71
$68.96
$75.39
Medium risk (<10%) entry points
Buy Call
Sell Call
$88.62
Buy Put:
Sell Put:
$87.25
$77.46
$78.85
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
MKC
Sharpe Ratio:
0.18%
Comparison:
MKC, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -86.45% lower than the industry
& is -92.21% lower than the market/S&P 500 average
Average Returns/Yield of
MKC
Daily returns:
0.01%
Weekly returns:
0.06%
Monthly returns:
0.24%
Yearly returns:
8.42%
Comparison of returns:
Average annual returns/yield (last 3 years) is -65.74% below industry average
Classification:
MKC, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.83
Statistical test of Returns:
MKC has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.79%
Weekly Volatility:
3.99%
Monthly Volatility:
7.98%
Yearly Volatility:
27.65%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.23%
Volatility in last five trading days has been -31.08% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.65%
Weekly VaR:
-8.17%
Monthly VaR:
-16.34%
How Much Can the price of
MKC
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-14%
Worst case (decline):
-56.61%
This translates to price declining to:
$71.16
This translates to price declining to:
$36.04
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
MKC is a 15.34% riskier investment compared to the market/S&P 500 & is -1.19% less risky than Nasdaq(IXIC)
Risk (measured by volatility) is -21.96% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
MKC
Beta in relation to market/S&P 500--0.50
Expected beta in 1 year's time:
-
Expected beta in 3 year's time:
-
Unlevered (debt free) Beta:
0.292
Beta in relation to Nasdaq (XNAS):
0.442
Beta in relation to all global stocks::
0.558
Beta Comparison & Analysis
Beta of competitors/peers::
0.539
Beta is -7.59% lower than peers
Average Industry Beta:
0.586
Beta is -14.99% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
8.88%
Sustainable growth rate is -1.89% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.037
Alpha is -392.99% below industry average alpha yield
Alpha is -234% below the market average
Analysis of Cost of Capital of
MKC
Equity cost of capital:
0.066
Equity cost of capital is -8.40% below industry mean WACC
Unlevered (without debt) cost of capital:
3.85%
Before-tax cost of debt:
2.49%
After-tax cost of debt:
1.97%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.97%
WACC is -17.68% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$23.63
Revenue growth rate per share of (3Y):
4.83
Annual revenue growth rate is -58.06% below industry average
EPS:
$2.53
Expected Annual growth rate of EPS (3Y):
1.49%
Expected future EPS growth rate is -91.75% lower than the Packaged Foods industry
Free cash flow (FCF) per share:
$1.83
Balance sheet equity growth per share: 30.71%
Equity growth rate per share is 532.51% higher than the industry
Debt per share
$14.78
EBITDA per share
$4.26
Valuation Analysis Today of
MKC
P/E Ratio:
32.8
P/E Ratio of Competitors/Peers:
19.46
P/E ratio is 68.55% higher than main peers & is -15.12% lower than the industry
Stock price/value with industry average P/E ratio: $97.76
MKC is -15.05% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $24.55
Present value of the expected future dividends only: $13.62
P/S (Price to Sales ratio):
3.52
Price to sales ratio is 51.58% above the industry mean
P/B (Price to book value ratio):
4.83
Price to free cash flow: 45.33
Price to free cash flow ratio is 36.75% higher than the industry
Net income growth rate (3Y):
-20.40%
Net income growth rate is -289.66% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 14.71%
Dividend yeild: 1.71%
Previous Dividend: $0.37
Previous adjusted dividend: $0.37
Previous Dividend: $1.42
Expected next dividend best case: $0.49
Expected next dividend worst case: $0.25
Average dividend payment (long-term): $0.43
Average dividend increase/decrease (growth rate) % per period: -3.50%
Expected next dividend payment date: 25/07/2022
Expected next dividend record date: 07/11/2022
Expected next dividend declaration date: 28/06/2022
Previous dividend payment date: 25/04/2022
Previous dividend record date: 04/11/2022
Previous dividend declaration date: 30/03/2022
Dividend History:
2022-04-08--$0.37
2021-10-08--$0.34
2021-04-09--$0.34
2021-12-30--$0.37
2021-07-09--$0.34
2020-12-30--$0.34
Dividend growth rate is 865.46% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
86.23%
Net debt to equity ratio:
109.48%
Debt to assets ratio:
30.64%
Net debt to assets ratio:
38.90%
Debt-to-asset ratio is -43.16% below industry average
Ability to repay debt:
Interest coverage ratio:
8.54
Interest coverage ratio is -96.54% less than industry average
Looking forward:
Debt growth rate:
9.88%
Annual debt growth is -96% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.09%
Analysis of Key Statistics
Correlation of price movement with the market:
0.541
Statistical significance of correlation:
MKC has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.429
Stock price is 26.19% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.429
Correlation of price movement with Nasdaq (^IXIC):
0.013
Covariance of price movement with the market:
0.014
Kurtosis
16.417
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.009
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
MKC
Gross Profit Margin Ratio:
150%
Operating Profit Margin Ratio:
14.28%
Operating profit margin is 195.94% higher than the industry
Net Profit Margin Ratio:
150%
Effective Tax Rate:
18.26%
Effective tax rate is -55.19% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
14.63%
Return on equity (ROE) is 32.47% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
5.20%
Return on assets (ROA) is 16.42% higher than the industry
Financial Leverage:
1.4x
Current Ratio:
0.73
Current ratio is -73.47% below industry average
Cash Conversion Cycle (days):
-42
Cash conversion cycle is -185.57% below industry average
The remaining useful life of property plant & equipment is: 0.4 years
Stock based compensation to net income ratio:
1.65%
In-depth Efficiency Analysis
Revenue generated per employee:
452.8K
Each employee generates -42% less revenue than industry average revenue per employee
EBITDA generated per employee:
81.7K
Each employee generates -28% less EBITDA than industry average revenue per employee
Profit generated per employee:
48.1K
Each employee generates -8% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 1.8K
Each employee generates -50% less free cash flow than industry average revenue per employee
Assets/Capital per employee
764.4K
Each employee generates -50% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
MKC
MCCORMICK & COMPANY, INCORPORATED (XNYS:MKC)
CHURCH & DWIGHT CO., INC. (XNYS:CHD)
COCA-COLA EUROPACIFIC PARTNERS PLC (XNAS:CCEP)
Mexican Economic Development, Inc. (XNYS:FMX)
KELLOGG COMPANY (XNYS:K)
THE CLOROX COMPANY (XNYS:CLX)
BF-A
BF-B
TYSON FOODS, INC. (XNYS:TSN)
Current Analyst Ratings
Strong buy�4%
Buy�8%
Hold�42%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
5/31/22
Revenue:
6.34B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
3.95B
2.39B
-
-
1.41B
-
-
1.41B
-
134.00M
192.60M
1.14B
905.50M
672.80M
792.80M
144.80M
672.80M
Statement of Cash Flow
Date:
Period:
49.00M
Differed Income Tax :
-
Stock Based Compensation :
11.10M
Change in Working Capital :
- 197000.00K
Accounts Receivables:
33.20M
Other Working Capital:
- 185500.00K
Other Non-Cash Items:
- 100.00K
Net Cash Provided by Operating Activities:
17.90M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
2/28/22
2022
Q1
338.40M
-
338.40M
516.70M
1.24B
139.70M
2.24B
1.14B
5.33B
3.44B
-
-
788.80M
10.70B
-
12.94B
1.07B
1.41B
-
-
596.60M
3.08B
3.96B
488.90M
5.25B
-
8.33B
2.09B
2.92B
- 416000.0K
-
February 28, 2022 at 7:00:00 AM
5.36B
4.60B
12.92B
-
5.37B
5.0B
-
- 43700.00K
- 43700.00K
- 3500.00K
-
- 8700.00K
- 99000.00K
115.60M
4.40M
8.10M
- 13300.00K
338.40M
351.70M
17.90M
- 43700.00K
- 25800.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
MKC
2023
2024
2025
2026
2027
$87.19
$90.11
$93.12
$96.24
$99.46