McDonalds Return On Equity vs. Earnings Per Share

MCD Stock  USD 281.95  0.07  0.02%   
Based on McDonalds' profitability indicators, McDonalds is yielding more profit at the present time then in previous quarter. It has a moderate chance of reporting better profitability numbers in April. Profitability indicators assess McDonalds' ability to earn profits and add value for shareholders.

McDonalds Return On Equity

(1.71)

At present, McDonalds' Days Of Sales Outstanding is projected to increase significantly based on the last few years of reporting. The current year's Price Sales Ratio is expected to grow to 8.89, whereas Operating Cash Flow Sales Ratio is forecasted to decline to 0.20. At present, McDonalds' Income Before Tax is projected to increase significantly based on the last few years of reporting. The current year's Net Income is expected to grow to about 8.9 B, whereas Total Other Income Expense Net is projected to grow to (1.2 B).
Current ValueLast YearChange From Last Year 10 Year Trend
Gross Profit Margin0.560.5562
Slightly Up
Slightly volatile
Net Profit Margin0.350.3322
Notably Up
Slightly volatile
Operating Profit Margin0.480.4607
Sufficiently Up
Slightly volatile
Pretax Profit Margin0.430.4127
Sufficiently Up
Slightly volatile
Return On Assets0.0880.1508
Way Down
Pretty Stable
For McDonalds profitability analysis, we use financial ratios and fundamental drivers that measure the ability of McDonalds to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well McDonalds utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between McDonalds's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of McDonalds over time as well as its relative position and ranking within its peers.
  
Check out Correlation Analysis.
For information on how to trade McDonalds Stock refer to our How to Trade McDonalds Stock guide.
Is McDonalds' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of McDonalds. If investors know McDonalds will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about McDonalds listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
0.083
Dividend Share
6.23
Earnings Share
11.56
Revenue Per Share
35.024
Quarterly Revenue Growth
0.081
The market value of McDonalds is measured differently than its book value, which is the value of McDonalds that is recorded on the company's balance sheet. Investors also form their own opinion of McDonalds' value that differs from its market value or its book value, called intrinsic value, which is McDonalds' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because McDonalds' market value can be influenced by many factors that don't directly affect McDonalds' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between McDonalds' value and its price as these two are different measures arrived at by different means. Investors typically determine if McDonalds is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, McDonalds' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

McDonalds Earnings Per Share vs. Return On Equity Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining McDonalds's current stock value. Our valuation model uses many indicators to compare McDonalds value to that of its competitors to determine the firm's financial worth.
McDonalds is considered to be number one stock in return on equity category among related companies. It is considered to be number one stock in earnings per share category among related companies . At present, McDonalds' Return On Equity is projected to slightly decrease based on the last few years of reporting.. Comparative valuation analysis is a catch-all model that can be used if you cannot value McDonalds by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for McDonalds' Stock . Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the McDonalds' earnings, one of the primary drivers of an investment's value.

McDonalds Earnings Per Share vs. Return On Equity

Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.

McDonalds

Return On Equity

 = 

Net Income

Total Equity

 = 
null
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Earnings per Share (EPS) denotes the portion of a company's earnings that is allocated to each share of common stock. To calculate Earnings per Share investors will need to take a company's net income, subtract any dividends for preferred stock, and divide it by the number of average outstanding shares. EPS is usually presented in two different ways: basic and diluted. Fully diluted Earnings per Share takes into account effects of warrants, options, and convertible securities and is generally viewed by analysts as a more accurate measure.

McDonalds

Earnings per Share

 = 

Earnings

Average Shares

 = 
11.56 X
Earnings per Share is one of the most critical measures of the firm's current share price and is used by investors to determine the overall company profitability, especially when compared to the EPS of similar companies.

McDonalds Earnings Per Share Comparison

McDonalds is currently under evaluation in earnings per share category among related companies.

McDonalds Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in McDonalds, profitability is also one of the essential criteria for including it into their portfolios because, without profit, McDonalds will eventually generate negative long term returns. The profitability progress is the general direction of McDonalds' change in net profit over the period of time. It can combine multiple indicators of McDonalds, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for 2024
Accumulated Other Comprehensive Income-2.5 B-2.6 B
Operating Income11.7 B12.3 B
Income Before Tax10.5 B11 B
Total Other Income Expense Net-1.2 B-1.2 B
Net Income8.5 B8.9 B
Income Tax Expense2.1 B1.4 B
Net Income Applicable To Common Shares7.1 B4.6 B
Net Income From Continuing Ops8.3 B6.2 B
Non Operating Income Net Other-304.7 M-289.5 M
Interest Income148.1 M140.7 M
Net Interest Income-1.2 B-1.2 B
Change To Netincome-15 M-14.3 M
Net Income Per E B T 0.80  0.54 

McDonalds Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on McDonalds. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of McDonalds position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the McDonalds' important profitability drivers and their relationship over time.

Use McDonalds in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if McDonalds position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in McDonalds will appreciate offsetting losses from the drop in the long position's value.

McDonalds Pair Trading

McDonalds Pair Trading Analysis

The ability to find closely correlated positions to McDonalds could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace McDonalds when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back McDonalds - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling McDonalds to buy it.
The correlation of McDonalds is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as McDonalds moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if McDonalds moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for McDonalds can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your McDonalds position

In addition to having McDonalds in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

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ETF themes focus on helping investors to gain exposure to a broad range of assets, diversify, and lower overall costs. The Corporate ETFs theme has 201 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Corporate ETFs Theme or any other thematic opportunities.
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When determining whether McDonalds is a strong investment it is important to analyze McDonalds' competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact McDonalds' future performance. For an informed investment choice regarding McDonalds Stock, refer to the following important reports:
Check out Correlation Analysis.
For information on how to trade McDonalds Stock refer to our How to Trade McDonalds Stock guide.
Note that the McDonalds information on this page should be used as a complementary analysis to other McDonalds' statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the CEOs Directory module to screen CEOs from public companies around the world.

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When running McDonalds' price analysis, check to measure McDonalds' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy McDonalds is operating at the current time. Most of McDonalds' value examination focuses on studying past and present price action to predict the probability of McDonalds' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move McDonalds' price. Additionally, you may evaluate how the addition of McDonalds to your portfolios can decrease your overall portfolio volatility.
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To fully project McDonalds' future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of McDonalds at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include McDonalds' income statement, its balance sheet, and the statement of cash flows.
Potential McDonalds investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although McDonalds investors may work on each financial statement separately, they are all related. The changes in McDonalds's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on McDonalds's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.