McDonald's Corporation (MCD)
Quantitative Summary
DeterministicAt 23.0x earnings — a 34% discount to the sector average of 35.0x — MCD is in the lower valuation range. Financial health is average: Piotroski 6/9, Altman Z 4.9. DCF fair value of $113 implies 63% downside based on model assumptions.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedMcDonald's demonstrates robust fundamental economics characterized by a significant 10.3% spread between its 17.9% ROIC and 7.5% WACC, indicating efficient capital allocation relative to cost of equity. The DuPont decomposition reveals that this return is primarily driven by exceptional margin expansion rather than leverage or asset turnover; with net margins at 31.9% and gross margins at 57.4%, the business model exhibits high operating efficiency despite modest revenue growth of 3.7%. Quality metrics further validate this structural strength, as a Piotroski F-Score of 6/9 suggests solid financial health while an Altman Z-Score of 4.9 places the firm in a safe zone regarding bankruptcy risk, and a Beneish M-Score of -2.61 signals low probability of earnings manipulation.
Valuation analysis presents a distinct divergence between historical multiples and intrinsic value calculations. The current P/E of 25.6x trades at a substantial discount to both its five-year average of 58.1x and the sector mean of 34.6x, implying the market is pricing in significantly lower growth expectations than the DCF model suggests. While the implied ten-year free cash flow growth rate stands at 18.2%, the resulting fair value estimate of $98 indicates a -67.9% downside from current levels, suggesting the stock may be overvalued relative to its calculated intrinsic worth despite appearing cheap on historical multiple comparisons.
Risk and factor tilts offer mixed signals regarding future performance drivers. The stock exhibits strong exposure to profitability factors with an RMW score of 0.188 and maintains a value tilt via an HML score of 0.114, yet it generates positive Fama-French alpha of 7.15% annually, hinting at outperformance relative to size and book-to-market benchmarks. However, these fundamental advantages are counterbalanced by notable insider activity; net selling totaling over $24 million in the last ninety days suggests internal stakeholders may be reducing exposure despite the attractive valuation metrics relative to history.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 4% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 6% | 7.5% | 9.5% |
|---|---|---|---|
| 2% | $138 | $92 | $60 |
| 3% | $185 | $113 | $70 |
| 4% | $280 | $147 | $84 |
Center = base case. Green = >10% upside, Red = >10% downside vs $276.36.
Pre-computed DCF: WACC=7.5%, terminal growth 3%. Fair value $113 (-62.8%). Not investment advice.
Valuation Context
Currently trading 56% below its 5-year average P/E of 58.3x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedThe current price action for McDonald's Corporation at $305.68 presents a complex landscape regarding institutional positioning, particularly when viewed alongside the broader context of its Consumer Cyclical sector classification. While specific moving average crossovers are not explicitly detailed in the provided snapshot, the proximity to this elevated level often prompts larger market participants to scrutinize support zones closely before committing significant capital. In such environments, institutions may be accumulating shares quietly if they perceive the current valuation as a long-term opportunity, or conversely, they might be reducing exposure if technical resistance appears imminent without accompanying volume expansion to validate upward momentum. Volume trends serve as a critical lens for interpreting these potential shifts in sentiment among major players. If trading activity were to surge significantly while price remains steady near $305.68, it could indicate aggressive accumulation by sophisticated entities anticipating future upside. Conversely, declining volume during periods of stability might suggest that large holders are waiting for clearer directional signals before repositioning their portfolios. The absence of definitive breakout or breakdown data in this summary necessitates a cautious interpretation; institutional behavior is frequently characterized by patience at key psychological levels rather than impulsive movements, suggesting that any major shift in positioning would likely be preceded by sustained price action and corroborating volume profiles not fully captured here.
Quant Health Deep Dive
Profitability & Value Creation
✅ Conservative payout — room for dividend increases.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Dividend History
| Date | Amount | Change |
|---|---|---|
| 2026-06-02 | $1.8600 | 0.0% |
| 2026-03-03 | $1.8600 | 0.0% |
| 2025-12-01 | $1.8600 | +5.1% |
| 2025-09-02 | $1.7700 | 0.0% |
| 2025-06-02 | $1.7700 | 0.0% |
| 2025-03-03 | $1.7700 | 0.0% |
| 2024-12-02 | $1.7700 | +6.0% |
| 2024-09-03 | $1.6700 | 0.0% |
| 2024-06-03 | $1.6700 | 0.0% |
| 2024-02-29 | $1.6700 | 0.0% |
| 2023-11-30 | $1.6700 | +9.9% |
| 2023-08-31 | $1.5200 | 0.0% |
Dividend and split data from SEC filings and market data. Amounts are per share, not adjusted for splits. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like XLY or DIA, the fund manager is mechanically forced to buy or sell MCD shares regardless of McDonald's Corporation's individual fundamentals. We estimate $26.2B of passive capital is structurally linked to MCD through 8 tracked ETFs. This substantial passive exposure means that ETF inflows and outflows — not company fundamentals — can dominate daily volume on this stock.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in McDonald's Corporation to visualize passive redemption contagion across ETFs and collateral stocks.
If McDonald's Corporation (MCD) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies AMAZON.COM INC (AMZN) as the most exposed collateral stock, sharing 2 ETFs with MCD. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 38 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
MCD Ownership Dynamics
Passive funds hold 1 in every 8 MCD shares, reducing daily market volatility.
McDonald's Corporation (MCD) exerts measurable gravity on the passive index market, currently representing 3.8% of the State Street Consumer Discretionary Select Sector SPDR ETF (XLY) and 3.5% of the DIA (DIA). Across 37 tracked ETFs, approximately 94M shares (13.3% of float) are held by passive funds and rarely trade on the open market. This level of passive ownership means index rebalances can create outsized volume events.
ETFs with Highest MCD Exposure
Float lock-up computed from 37 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
MCD Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for McDonald's Corporation over the past year sits near $304.22 (13% of 252-day volume). The current price of $276.36 sits 9.2% below the POC — suggesting potential mean-reversion upside if institutional demand reasserts at this level. The highly concentrated volume profile (13% at POC) indicates strong consensus on fair value — institutional participants have repeatedly transacted near this price.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
MCD Capital Efficiency
How efficiently does McDonald's Corporation convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
McDonald's Corporation converts 49% of its EBITDA into free cash flow, a healthy conversion rate indicating efficient capital management — the business generates substantial cash after reinvestment. The 51% reinvestment rate signals aggressive capacity expansion. The positive ROIC-WACC spread of 10.3% confirms that reinvested capital creates shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-08 | 12,320 | $283.70 | $3.5M |
| 2026-05-04 | 4 | $286.64 | $1,146.56 |
| 2026-05-01 | 630 | $293.59 | $184,961.7 |
| 2026-04-22 | 402 | $301.84 | $121,339.68 |
| 2026-04-20 | 927 | $311.36 | $288,630.72 |
| 2026-04-16 | 785 | $306.26 | $240,414.1 |
| 2026-04-15 | 3 | $303.22 | $909.66 |
| 2026-04-07 | 23 | $309.76 | $7,124.48 |
| 2026-04-06 | 4 | $307.14 | $1,228.56 |
| 2026-03-27 | 563 | $308.93 | $173,927.59 |
| 2026-03-26 | 10 | $311.70 | $3,117 |
| 2026-03-24 | 3,425 | $308.47 | $1.1M |
| 2026-03-23 | 8,385 | $308.85 | $2.6M |
| 2026-03-20 | 3,553 | $309.58 | $1.1M |
| 2026-03-17 | 1,836 | $326.65 | $599,729.4 |
| 2026-03-09 | 175 | $328.06 | $57,410.5 |
| 2026-03-02 | 13,300 | $341.06 | $4.5M |
| 2026-02-27 | 13,000 | $334.53 | $4.3M |
| 2026-02-23 | 1,066 | $329.23 | $350,959.18 |
| 2026-02-20 | 7,806 | $327.11 | $2.6M |
| 2026-02-17 | 300 | $327.58 | $98,274 |
| 2026-02-13 | 1,089 | $332.08 | $361,635.12 |
| 2026-02-09 | 800 | $327.16 | $261,728 |
| 2026-02-03 | 1,547 | $318.53 | $492,765.91 |
| 2026-01-26 | 2,000 | $309.25 | $618,500 |
| 2026-01-21 | 5,522 | $302.84 | $1.7M |
| 2026-01-20 | 1,900 | $307.43 | $584,117 |
| 2026-01-13 | 445 | $306.75 | $136,503.75 |
| 2026-01-12 | 3,700 | $307.32 | $1.1M |
| 2025-12-26 | 177 | $313.33 | $55,459.41 |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
SEC Comment Letters
SEC correspondence with the company regarding their filings. Comment letters often flag disclosure deficiencies, accounting concerns, or material omissions.
Source: SEC EDGAR correspondence. Comment letters are public records of SEC staff review of company filings.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| YUM | 0.525 | 0.584 | Moderate |
| KO | 0.480 | 0.457 | Moderate |
| PG | 0.468 | 0.479 | Moderate |
| TJX | 0.448 | 0.485 | Moderate |
| CL | 0.433 | 0.458 | Moderate |
| AEE | 0.432 | 0.403 | Moderate |
| AWK | 0.410 | 0.351 | Moderate |
| ED | 0.408 | 0.335 | Moderate |
| WMT | 0.404 | 0.418 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare MCD to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.