McDonald’s Corporation
🇺🇸 MCD · NYSE/NASDAQ · US5801351017
Consumer
USD 307.14 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
25.7
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 307.14 ÷ 11.95 = 25.7
TTM period through: 2025-12-31
Forward P/E (estimated): 23.1
Based on analyst estimates
Reference: Provider P/E (Trailing): 25.7
Yield (Fwd)
2.42%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 2.33%
Net Debt/EBITDA (TTM)
3.7x
Latest quarter: 14.6x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): 14.6x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
62.2%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 59.7%
Cash Flow Payout (TTM): 48.5%
FCF Coverage (TTM): 1.40x
EV/EBITDA
21.0x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
McDonald's is a premier global restaurant operator with an unrivaled competitive moat backed by its massive real estate portfolio and highly profitable franchise model. While the company boasts exceptional fundamentals and highly secure cash flows that easily cover its growing dividend, the current valuation (P/E 25.7) offers limited upside. Existing shareholders should maintain positions given the strong underlying business quality, but new investors should wait for a more attractive entry point with a higher starting yield.
Sector Context
McDonald's operates in the consumer sector as a global quick-service restaurant network, primarily functioning as a highly profitable real estate and franchising business. For dividend investors, this franchise-heavy model provides utility-like cash flow stability through predictable rent and royalty collections, shielding the company from direct restaurant operating margin pressures.
📊 Strategy Analysis
- • Exceptional profitability with an EBITDA margin of 54.4%, driven by its highly stable franchise and real estate business model.
- • Highly secure dividend with a conservative FCF payout ratio of 48.48% (1.40x coverage) and a 10-year track record of consistent growth.
- • Demonstrated pricing power and ability to adapt to macroeconomic pressures, utilizing its massive scale to introduce value menus that defend market share.
⚠ What to Watch
- • Valuation is significantly stretched with a TTM P/E of 25.70, well above the strategy's 8-15x ideal target and the extended 20x monopoly threshold.
- • Current dividend yield of 2.33% falls below the strategy's 3% minimum requirement for optimal income generation.
- • Net Debt/EBITDA of 3.69x is slightly elevated above the standard 3x threshold, though this is partially mitigated by highly predictable franchise cash flows.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-05
Disclaimer: This information is for educational purposes only. Not financial advice.