McCormick & Co. (MKC)
Consumer · NYSE · US
Fundamentals
Valuation and ratings
McCormick & Co. trades at $52.90, close to the $51.09 our discounted cash flow model puts on the business. On this measure the market and the model broadly agree, so the interesting question is which of them is wrong.
Our moat model scores it 73 out of 100, which is a wide moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 8.7 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About McCormick & Co.
McCormick & Company, Incorporated manufactures, markets, and distributes herbs, spices, seasoning mixes, condiments, and other flavorful products to the food industry. It operates in two segments, Consumer and Flavor Solutions. The Consumer segment offers spices, herbs, and seasonings, as well as condiments, sauces, and desserts. This segment markets its products under the McCormick, French's, Frank's RedHot, Lawry's, Cholula Hot Sauce, Club House, Gourmet Garden, and OLD BAY brands in the Americas; Ducros, Schwartz, Kamis, LA Drogheria, and Vahiné brands in Europe, the Middle East, and Africa; and McCormick and DaQiao brands in the Asia/Pacific (APAC), as well as desserts under the Aeroplane brand; and packaged chilled herbs under the Gourmet Garden brand. Its authentic regional brands include Zatarain's, Stubb's, Thai Kitchen, and Simply Asia. The company also supplies its products under private labels. This segment serves retailers, including grocery, mass merchandise, warehouse clubs, discount and drug stores, and e-commerce retailers directly and indirectly through distributors and wholesale foodservice suppliers. The Flavor Solutions segment offers seasoning blends, spices, herbs, condiments, coating systems, and compound flavors to multinational food manufacturers and foodservice customers. It serves foodservice customers directly and indirectly through distributors. The company was founded in 1889 and is headquartered in Hunt Valley, Maryland.
MKC passes 6 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
13 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Cliff Asness, AQR CAPITAL MANAGEMENT LLC$54.62M · 0.0% of book
- Ken Griffin, CITADEL ADVISORS LLC$52.54M · 0.0% of book
- Marshall Wace, MARSHALL WACE, LLP$28.93M · 0.0% of book
- Two Sigma, TWO SIGMA INVESTMENTS, LP$23.85M · 0.0% of book
- Impax Asset Management, Impax Asset Management Group plc$19.64M · 0.1% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is McCormick & Co. (MKC) undervalued?
Against our discounted cash flow estimate of $51.09, MKC at $52.90 is 3% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own MKC?
13 of the institutions we track reported a position in MKC in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is MKC's P/E ratio?
MKC trades at 8.7 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.