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McCormick: Strengths, Weaknesses, Opportunities And Threats

William Bias profile picture
William Bias


  • McCormick employees are allowed to own stock via their 401(K) plans allowing them a sense of ownership in what they are doing.
  • McCormick commands a large and expanding global presence.
  • McCormick understands that acquisitions and innovation will drive its long-term success.

Baltimore-based spice, condiment and flavoring giant McCormick (NYSE: NYSE:MKC) sells products crucial in making the necessary biological function of eating more pleasant. After all, what are mashed potatoes without gravy and toast without cinnamon sprinkled on top? I guess that's a matter of opinion.

However, just because a company sells an appealing food product doesn't necessarily make it a good investment. One of the best ways to objectively evaluate a company is to look at it from the standpoint of strengths, weaknesses, opportunities and threats. Let's take a look at McCormick.


Employee engagement - I believe that any business worth its salt will take good care of its stakeholders, especially its employees. Employees who are well treated are more likely to invest themselves in taking care of the No. 1 stakeholder in any organization - the customer. McCormick exhibits evidence of an employee-centric culture. Employees are allowed to own company stock within their 401(k) plans. According to McCormick's latest proxy shares owned through the plan accounted for 19% of its common stock.

Employee engagement has a strong historical precedent according to Baltimore Magazine. During the great depression Charles McCormick Sr. took over the company when his uncle, the founder of McCormick, died in 1932. One of the first things he did was institute a profit sharing program and free holiday turkeys despite being called a communist by the business community in Baltimore.

Pro-active management - Engagement isn't confined to the rank and file. McCormick's senior management understands that apathy in the face of competition can mean death to a business. They are big believers in innovation and growth by smart acquisitions, more on that later.

Market leadership - McCormick commands roughly 22% of the herb and spice market worldwide. This means that the name McCormick gets a lot of eyeballs

This article was written by

William Bias profile picture
I have been analyzing stocks since 1992 and a freelance writer since 2012.

Analyst’s Disclosure: The author is long MKC, WMT. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (6)

Great article.

I could not agree more with your evaluation. We should see a short term correction, followed by more growth and higher stock price.

I like companies that invest in people, and believe those are the ones that last long-term.

Personal move: Short put option MKC to take in this correction, but believe strongly it will rise after a few dollar drop.
William Bias profile picture
Thanks for reading YoungandHungry.
You may be waiting a long time for a correction. We may end up ranging for a long time. It's a new environment for quality names like MKC. I've been watching this stock for years and waiting. So, finally on March 18, I bought an entry position at 71 and change. It's up nearly 10%. As it drifts over the next few years, I'll keep buying which is my suggestion if you'll like an entry into this quality company.
William Bias profile picture
Thanks for reading theo_rhetoric.
This is a fabulous company. One of the best buy and hold for a very long time/forever stocks. However, the author is correct as now is not the best time to buy. Need a substantial correction.
William Bias profile picture
Yes it is a little overvalued. Thanks for reading TheJesse.
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