McKesson Stock Analysis, Valuation (NYSE:MCK)

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$149.28 $0.22 (0.15%) MCK stock closing price Apr 18, 2018 (Closing)
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McKesson
Updated on : Apr 18, 2018
previous close
MCK 149.3 (0%)
S&P 500 2708.6 (0%)
Closing Price On: Apr 18, 2018
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Medical-Dental supplies
Sector :
Medical
5 Quarter Revenue
Revenue Growth
2018-Q3
$billion
%
YOY GROWTH
Compared to the industry
Operating Profit
Operating Margin:
3.1%
Sector Average:
-7.3%
5 Quarter Net Profit
Net Margins
2018-Q3
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
8.79B
Debt/Equity Ratio:
 0.74
Compared to the industry
Cash Flow
Operating cash flow:
-$16M
Net Income:
$903M
Dividend Yield
MCK dividend yield:
0.83%
PROS      CONS
Operating Margins
ROIC
ROE
PE Valuation
PS Valuation
High Debt Burden
Cash Flow
FCF Margin
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
MCK PS :
0.2
Industry PS :
5.9
Sector:   Medical.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
26.5%
Return on Equity:
44.5%
Free Cash Flow Margin:
-0.3%
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McKesson Stock Analysis

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Investors can watch the Amigobulls McKesson stock analysis video here. This is our analyst opinion covering the buy and sell arguments for MCK stock.

Note: Amigobulls stock rating is our opinion based on the historical performance of the company's fundamentals. It is not indicative of the future performance of the stock.

McKesson Corporation Stock Rating 3.9/5

Amigobulls MCK stock analysis relies on business fundamentals such as McKesson revenue growth, profits and return on equity measures from the latest quarter 2018 Q3 earnings. We also use relative valuation metrics like PE ratio and price to sales ratio for McKesson valuation analysis. Our McKesson stock rating is based on company's fundamentals like balance sheet risk and cash flow position.

Should you buy MCK stock?

  • The TTM operating margin was good at 3.1% for McKesson.
  • The price to earnings multiple of 11.9 is attractive when compared with the industry average PE ratio of 24.9.
  • The lower PS ratio 0.2 for MCK stock versus Medical-Dental supplies industry average of 5.9 is a positive for the company.
  • McKesson's return on invested capital of 26.5% is good.
  • Return On Equity (ROE) which is a measure of the company's profitability, looks great for McKesson at 44.5%.

Should you sell MCK stock?

  • McKesson has a debt/equity ratio of  0.74, which is worse than the average in the Medical sector.
  • The company has a negative free cash flow margin of -0.3%.

Comments on this video and McKesson stock

Amigobulls McKesson stock analysis helps in evaluating the financial statements of a company to arrive at a conclusion about the fair value of MCK stock. Fundamental analysis of a company is the most often used approach to find the intrinsic value of a stock.

McKesson revenue growth is an indicator of the demand for a company's products while profit margin is indicative of company's pricing power and pricing strategy. One can also combine technical analysis and fundamental analysis to get a holistic picture about MCK stock.