Microsoft Excel LibreOffice Calc

McDonald’s Corp. (MCD)


Price to FCFE (P/FCFE)

Difficulty: Intermediate


Free Cash Flow to Equity (FCFE)

McDonald’s Corp., FCFE calculation

US$ in thousands

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12 months ended Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Net income 5,924,300  5,192,300  4,686,500  4,529,300  4,757,800 
Net noncash charges 1,515,100  1,339,400  1,206,100  1,841,900  2,036,100 
Changes in working capital items (472,700) (980,500) 167,000  167,900  (63,600)
Cash provided by operations 6,966,700  5,551,200  6,059,600  6,539,100  6,730,300 
Capital expenditures (2,741,700) (1,853,700) (1,821,100) (1,813,900) (2,583,400)
Net short-term borrowings 95,900  (1,050,300) (286,200) 589,700  510,400 
Long-term financing issuances 3,794,500  4,727,500  3,779,500  10,220,000  1,540,600 
Long-term financing repayments (1,759,600) (1,649,400) (822,900) (1,054,500) (548,100)
Free cash flow to equity (FCFE) 6,355,800  5,725,300  6,908,900  14,480,400  5,649,800 

Based on: 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-24).

Item Description The company
FCFE Free cash flow to equity is the cash flow available to McDonald’s Corp.’s equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made. McDonald’s Corp.’s FCFE declined from 2016 to 2017 but then increased from 2017 to 2018 not reaching 2016 level.

Price to FCFE Ratio, Current

McDonald’s Corp., current P/FCFE calculation, comparison to benchmarks

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No. shares of common stock outstanding 759,444,174
Selected Financial Data (USD $)
Free cash flow to equity (FCFE) (in thousands) 6,355,800 
FCFE per share 8.37
Current share price (P) 209.39
Ratio
P/FCFE 25.02
Benchmarks
P/FCFE, Competitors1
Booking Holdings Inc. 25.15
Delta Air Lines Inc. 15.01
Marriott International Inc. 14.32
Starbucks Corp. 6.94
P/FCFE, Sector
Travel & Leisure 14.07
P/FCFE, Industry
Consumer Services 15.28

Based on: 10-K (filing date: 2019-02-22).

1 Click competitor name to see calculations.

If company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.

Otherwise, if company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.


Price to FCFE Ratio, Historical

McDonald’s Corp., historical P/FCFE calculation, comparison to benchmarks

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Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
No. shares of common stock outstanding1 765,317,332 794,497,880 818,993,182 901,607,888 961,118,669
Selected Financial Data (USD $)
Free cash flow to equity (FCFE) (in thousands)2 6,355,800  5,725,300  6,908,900  14,480,400  5,649,800 
FCFE per share3 8.30 7.21 8.44 16.06 5.88
Share price1, 4 183.17 163.06 129.05 118.37 94.98
Ratio
P/FCFE5 22.06 22.63 15.30 7.37 16.16
Benchmarks
P/FCFE, Competitors6
Booking Holdings Inc. 24.98 15.04 17.25 11.84 12.85
Delta Air Lines Inc. 13.66 15.41 14.32 9.45 46.93
Marriott International Inc. 14.47 29.33 8.83 12.39 16.77
Starbucks Corp. 5.44 26.95 18.49 33.79 299.17
P/FCFE, Sector
Travel & Leisure 12.58 20.54 15.11 11.35 21.12
P/FCFE, Industry
Consumer Services 13.16 18.58 17.17 14.77 17.50

Based on: 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-24).

1 Data adjusted for splits and stock dividends.

2 See Details »

3 2018 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 6,355,800,000 ÷ 765,317,332 = 8.30

4 Close price on the filing date of McDonald’s Corp.’s Annual Report.

5 2018 Calculation
P/FCFE = Share price ÷ FCFE per share
= 183.17 ÷ 8.30 = 22.06

6 Click competitor name to see calculations.

Ratio Description The company
P/FCFE Price to free cash flow to equity is cash valuation indicator of stockholders’ equity. McDonald’s Corp.’s P/FCFE ratio increased from 2016 to 2017 but then slightly declined from 2017 to 2018.