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McKesson (MCK) Stock Analysis

Here is a fundamental analysis of McKesson (MCK), benchmarking its profitability, financial strength, dividend and valuation against its industry group peers.

Performance

Cumulative Growth

MCK
GSPC
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McKesson (MCK) vs. S&P 500 (GSPC): Growth of a $10,000 investment over the past five years. Adjusted for dividends and splits.

Trailing Returns

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Trailing total returns for McKesson (MCK) and S&P 500 (GSPC). Returns over one year are annualized.

Performance at a Glance

McKesson (MCK) metric values compared with Health Care Equipment & Services industry-group medians
MetricCurrent stock: MCKIndustry group median
1-Year Return7.72%6.07%

Risk

Drawdown

MCK
GSPC
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McKesson (MCK) vs. S&P 500 (GSPC): Drawdown from the running peak over the past five years. Each line shows the decline from its prior peak; 0% marks a new high.

Risk at a Glance

McKesson (MCK) metric values compared with Health Care Equipment & Services industry-group medians
MetricCurrent stock: MCKIndustry group median
1-Year Volatility29.15%49.54%
Beta0.300.89

Company Profile

Company profile fields for McKesson (MCK)
Profile ItemMCK
NameMcKesson Corporation
Country/RegionUnited States
GICS SectorHealth Care
GICS Industry GroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
GICS Sub-IndustryHealth Care Distributors
Market Capitalization94.25 billion USD
CurrencyUSD
ExchangeNYSE
Listing DateNovember 10, 1994
Security TypeCommon Stock

Valuation

Price-to-Earnings Ratio (TTM)

McKesson (MCK) trades at P/E ratio of 20.41, near the industry’s usual earnings multiple. The stock is not showing a clear peer discount or premium on trailing earnings.

MCK

Health Care Equipment & Services industry group

20.41

Group distribution
Max
80.40
Q3
44.58
Median
28.09
MCK
20.41
Q1
19.76
Min
0.91
Largest peers
ISRG
50.01
CVS
44.72
SYK
36.09
UNH
30.76
ABT
24.70
MDT
21.50
MCK
20.41
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Where McKesson (MCK) stands on P/E ratio within its Health Care Equipment & Services peer group — the box is the group’s distribution and the dots its largest members.

Price-to-Sales Ratio (TTM)

McKesson (MCK) trades at 0.23 on P/S ratio, in the lower sales-valuation quartile for its industry. That points to a cheaper revenue stream than most peers, with margin quality still doing the heavy lifting.

MCK

Health Care Equipment & Services industry group

0.23

Group distribution
Max
8.62
Q3
4.20
Median
1.94
Q1
1.01
MCK
0.23
Min
0.04
Largest peers
ISRG
13.76
SYK
4.74
ABT
3.40
MDT
2.83
UNH
0.82
CVS
0.32
MCK
0.23
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Where McKesson (MCK) stands on P/S ratio within its Health Care Equipment & Services peer group — the box is the group’s distribution and the dots its largest members.

Price-to-Book Ratio (MRQ)

McKesson (MCK) has negative P/B ratio of -43.32, which means reported book equity is negative. Price-to-book breaks down in this situation and should not be used as a valuation signal.

MCK

Health Care Equipment & Services industry group

-43.32

Group distribution
Max
11.03
Q3
5.50
Median
2.78
Q1
1.47
Min
-2.18
MCK
-43.32
Largest peers
ISRG
8.34
SYK
5.33
UNH
3.79
ABT
2.95
MDT
2.10
CVS
1.68
MCK
-43.32
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Where McKesson (MCK) stands on P/B ratio within its Health Care Equipment & Services peer group — the box is the group’s distribution and the dots its largest members.

Valuation at a Glance

McKesson (MCK) metric values compared with Health Care Equipment & Services industry-group medians
MetricCurrent stock: MCKIndustry group median
Price-to-Earnings Ratio (TTM)20.4128.09
Price-to-Sales Ratio (TTM)0.231.94
Price-to-Book Ratio (MRQ)-43.322.78
Free Cash Flow Yield6.00%4.00%

Profitability

Return on Equity (TTM)

No usable ROE is available for McKesson (MCK) this period, so the shareholder-equity return read is skipped.

MCK

Health Care Equipment & Services industry group

--

Group distribution
Max
53.65%
Q3
12.73%
Median
3.57%
Q1
-17.96%
Min
-59.21%
MCK
--
Largest peers
ISRG
17.23%
SYK
15.20%
ABT
12.33%
UNH
12.18%
MDT
9.93%
CVS
3.75%
MCK
--
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McKesson (MCK) doesn’t report ROE this period; the box shows the Health Care Equipment & Services group’s distribution and the dots its largest members.

Net Profit Margin (TTM)

McKesson (MCK) keeps 1.18% of revenue as net profit, roughly in line with the peer group’s normal net margin range. Its full cost stack is taking a typical share of sales for the industry.

MCK

Health Care Equipment & Services industry group

1.18%

Group distribution
Max
30.40%
Q3
7.96%
Median
1.27%
MCK
1.18%
Q1
-9.77%
Min
-34.34%
Largest peers
ISRG
28.15%
ABT
13.91%
SYK
13.21%
MDT
13.20%
UNH
2.68%
MCK
1.18%
CVS
0.72%
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Where McKesson (MCK) stands on net margin within its Health Care Equipment & Services peer group — the box is the group’s distribution and the dots its largest members.

Operating Profit Margin (TTM)

McKesson (MCK) turns 2.21% of revenue into operating profit, roughly in line with the peer group’s normal operating margin range. Its core cost structure looks typical for the industry.

MCK

Health Care Equipment & Services industry group

2.21%

Group distribution
Max
35.33%
Q3
11.89%
Median
5.44%
MCK
2.21%
Q1
-4.59%
Min
-25.61%
Largest peers
ISRG
30.87%
MDT
21.30%
SYK
17.82%
ABT
13.47%
UNH
8.05%
CVS
4.12%
MCK
2.21%
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Where McKesson (MCK) stands on operating margin within its Health Care Equipment & Services peer group — the box is the group’s distribution and the dots its largest members.

Profitability at a Glance

McKesson (MCK) metric values compared with Health Care Equipment & Services industry-group medians
MetricCurrent stock: MCKIndustry group median
Return on Equity (TTM)--3.57%
Return on Assets (TTM)4.99%3.10%
Net Profit Margin (TTM)1.18%1.27%
Operating Profit Margin (TTM)2.21%5.44%
Gross Profit Margin (TTM)3.60%52.99%

Financial Strength

Current Ratio (MRQ)

McKesson (MCK) has current ratio of 0.85, in the tighter-liquidity quartile for its industry. The short-term cushion is thinner than most peers carry, even if the absolute comfort level still depends on the business model.

MCK

Health Care Equipment & Services industry group

0.85

Group distribution
Max
7.79
Q3
4.29
Median
1.95
Q1
1.33
MCK
0.85
Min
0.04
Largest peers
ISRG
4.61
SYK
2.11
ABT
1.39
CVS
0.87
MCK
0.85
UNH
0.80
MDT
--
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Where McKesson (MCK) stands on current ratio within its Health Care Equipment & Services peer group — the box is the group’s distribution and the dots its largest members.

Debt-to-Equity Ratio (MRQ)

No usable debt-to-equity ratio is available for McKesson (MCK) this period, so the balance-sheet leverage read is skipped.

MCK

Health Care Equipment & Services industry group

--

Group distribution
Max
2.02
Q3
1.01
Median
0.60
Q1
0.16
Min
0.00
MCK
--
Largest peers
CVS
1.01
UNH
0.74
SYK
0.66
ABT
0.65
MDT
0.57
MCK
--
ISRG
--
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McKesson (MCK) doesn’t report debt-to-equity ratio this period; the box shows the Health Care Equipment & Services group’s distribution and the dots its largest members.

Financial Strength at a Glance

McKesson (MCK) metric values compared with Health Care Equipment & Services industry-group medians
MetricCurrent stock: MCKIndustry group median
Current Ratio (MRQ)0.851.95
Debt-to-Equity Ratio (MRQ)--0.60
Net Debt / EBITDA0.702.21

Dividends

Dividend Yield (TTM)

McKesson (MCK) has dividend yield of 0.42%, above the entire industry range. That headline income is large, but yields this far above peers often come from a falling share price or an at-risk payout, so dividend safety matters more than the percentage itself.

MCK

Health Care Equipment & Services industry group

0.42%

Group distribution
MCK
0.42%
Max
0.00%
Q3
0.00%
Median
0.00%
Q1
0.00%
Min
0.00%
Largest peers
MDT
3.59%
ABT
2.86%
CVS
2.61%
UNH
2.27%
SYK
1.13%
MCK
0.42%
ISRG
0.00%
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Where McKesson (MCK) stands on dividend yield within its Health Care Equipment & Services peer group — the box is the group’s distribution and the dots its largest members.

Dividend Payout Ratio (TTM)

McKesson (MCK) has payout ratio of 8.26%, above the peer distribution for its industry. The dividend consumes more reported earnings than peers normally do, leaving unusually thin earnings cover.

MCK

Health Care Equipment & Services industry group

8.26%

Group distribution
MCK
8.26%
Max
0.00%
Q3
0.00%
Median
0.00%
Q1
0.00%
Min
0.00%
Largest peers
CVS
116.67%
MDT
76.14%
ABT
67.23%
UNH
66.57%
SYK
39.81%
MCK
8.26%
ISRG
0.00%
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Where McKesson (MCK) stands on payout ratio within its Health Care Equipment & Services peer group — the box is the group’s distribution and the dots its largest members.

Dividends at a Glance

McKesson (MCK) metric values compared with Health Care Equipment & Services industry-group medians
MetricCurrent stock: MCKIndustry group median
Dividend Yield (TTM)0.42%0.00%
Dividend Payout Ratio (TTM)8.26%0.00%