McCormick & Co Inc (MKC, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at 74.89, McCormick & Co Inc has witnessed a daily loss of 0.78%, marked against a three-month change of -19.38%. A thorough analysis, underlined by the GF Score, suggests that McCormick & Co Inc is well-positioned for substantial growth in the near future.
Decoding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
McCormick & Co Inc's GF Score components are as follows:
- Financial strength rank: 5/10
- Profitability rank: 9/10
- Growth rank: 9/10
- GF Value rank: 7/10
- Momentum rank: 10/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in profitability, growth, and momentum, and decent ranks in financial strength and GF value, GuruFocus assigned McCormick & Co Inc the GF Score of 92 out of 100, which signals the highest outperformance potential.
Understanding McCormick & Co Inc's Business
With a market cap of $20.11 billion and sales of $6.52 billion, McCormick & Co Inc has established itself as a leading global manufacturer, marketer, and distributor of spices, herbs, extracts, seasonings, and other flavorings. The company's operating margin stands at 15.01%. McCormick's customer base includes top quick-service restaurants, retail grocery chains, and other packaged food and beverage manufacturers. Its global reach extends to nearly 40% of sales generated beyond its home turf to include 150 other countries and territories. In addition to its namesake brand, the firm's portfolio includes Old Bay, Zatarain's, Thai Kitchen, Frank's RedHot, French's, and the Cholula brand.
Profitability Rank Breakdown
The Profitability Rank shows McCormick & Co Inc's impressive standing among its peers in generating profit. The Piotroski F-Score confirms McCormick & Co Inc's solid financial situation based on Joseph Piotroski's nine-point scale, which measures a company's profitability, funding and operating efficiency. McCormick & Co Inc's strong Predictability Rank of 5.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, McCormick & Co Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 5.6%, which outperforms worse than 53.21% of 1716 companies in the Consumer Packaged Goods industry. Moreover, McCormick & Co Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 0.3, and the rate over the past five years is 5.6. This trend accentuates the company's continued capability to drive growth.
Conclusion
Given McCormick & Co Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. This analysis underscores the company's robust financial health and growth potential, making it a compelling investment opportunity. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
