Companies 3Q results look flat. Although last 12 month earnings were up by 2% from 27,0 bn.$ to 27,4bn.$ compared to 2011Y Net income has shrink a little bit by -1% from 5,5 bn.$ to 5,4 bn.$. On the other hand if you look at 5 year perspective both sales and net income are stably increasing, so few more years are needed to know if this is a long term action or just a one time decrease due to economic issues.
Billion $RevenueNet Income20082009201020112012Q329162330
Decreased is mainly due to that major sales of McDonald comes from Europe which is at depreciation now. When this cases to happen growth return can be expected. In general companies results are slightly negative.
Revenue by GeographyU.SEuropeAsia/Pacific/Middle Eastand AfricaOther32%23.3%39.1%
Companies balance sheet is average and have worsening equity level, which have drooped to 41% at Q3. Before it was around 45% which was more comfortable level. It was because share repurchase and dividends were over Net Income and due to that Equity has decreased. On the other hand due to increased Net income in past five year return on asset has increased. Liquidity is just ~1 which is not good. This might be just one time thing, because it was always around 1,2. In general companies balance structure is average.
Return onEquityEquity level20082009201020112012Q30.300.350.400.450.50
|Equity / share||13,9 bn.$||1,004 bn.||13,8 $/sh.|
|Market value||86,8 $||+73,0$||13,5 years|
|Year Net income before Depreciation||5,4 bn.$||+5,4$/sh.||6,2%|
Companies share book value is ~13,8$. Current market price is ~87$ which shows that market is paying ~73$ more, or more then 13,5 years of Net Income, which is 5,4 bn.$ which is a bit over then average but still in normal zone. Share profitability (Share market price/Net income before Depreciation) is 6,2% which is a bit lower then average. In general share value is a bit high.
Company has anounced that they increase dividends to 0,77$/share quarterly dividends or 3,08$/quarter) before tax or 3,55% investment yield, which is quite good. Payout ratio would be around 60%, which is a bit high. 5 year analysis show stable EPS and dividend growth, which is good. Company can be treated as long term stable growth stock. Investment is good for investment, but not to big.
Analysis source: McDonald 2012 3Q financial results