McCormick & Company, Incorporated (MKC) Stock Valuation — DCF Analysis
Packaged Foods · NYSE
Current Price
$48.95
Intrinsic Value
$61.38
+20.3% margin of safety
COMPETITIVE MOAT
↑Brand Recognition and Loyalty
McCormick's iconic brands like McCormick, Old Bay, and Frank's RedHot are deeply ingrained in consumer kitchens. This strong brand equity fosters repeat purchases and pricing power.
↑Distribution Network Strength
The company possesses an extensive and efficient global distribution network. This allows for broad product availability and strong relationships with retailers and foodservice partners.
↑Flavor Innovation Expertise
McCormick's long history and dedicated R&D in flavor science create a competitive advantage. They consistently develop new and appealing flavor profiles that resonate with evolving consumer tastes.
INVESTMENT RISKS
↓Commodity Price Volatility
Fluctuations in the cost of key ingredients like spices and herbs can impact profit margins. The company's ability to pass these costs onto consumers is not always guaranteed.
↓Intense Competition
The packaged food industry is highly competitive, with both large established players and smaller niche brands vying for market share. This can pressure pricing and marketing spend.
↓Changing Consumer Preferences
Shifts towards healthier eating, plant-based diets, or private label brands could reduce demand for some of McCormick's core offerings. Adapting to these trends requires continuous innovation.
Base case
MKC base case valuation
A base case discounted cash flow model for MKC estimates an intrinsic value of about $61.38 per share, against a current price of $48.95. The model assumes 9.0% annual free cash flow growth, a 10.0% discount rate, and a 16x exit multiple.
Intrinsic Value
$61.38
Margin of safety
+20.3%
Expected annual return
+4.6%
Base case assumptions: 9.0% annual growth, 10.0% discount rate, 16x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the MKC valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for McCormick & Company, Incorporated respond.
Open DCF Calculator for MKCCompany Overview
McCormick & Company, Incorporated is a global leader in the manufacture, marketing, and distribution of a wide array of flavorful products, including spices, seasoning mixes, and condiments, to the food industry. Its operations are divided into two primary segments: Consumer and Flavor Solutions. The Consumer segment provides an extensive range of items such as spices, herbs, seasonings, sauces, and desserts. These are sold under numerous prominent brands across various regions: McCormick, French's, Frank's RedHot, Lawry's Cholula Hot Sauce, Gourmet Garden, Club House, and OLD BAY in the Americas; Ducros, Schwartz, Kamis, Drogheria & Alimentari, and Vahiné throughout Europe, the Middle East, and Africa (EMEA); McCormick and DaQiao in China; and McCormick, Aeroplane, and Gourmet Garden in Australia. In addition, it offers specialized regional and ethnic brands like Zatarain's, Stubb's, Thai Kitchen, and Simply Asia, and also produces goods for private labels. Its customer base encompasses a broad spectrum of retailers, including grocery stores, mass merchandisers, warehouse clubs, discount and drug stores, and e-commerce platforms. Distribution to these outlets occurs both directly and indirectly via distributors and wholesale foodservice providers. The Flavor Solutions segment caters to large-scale food manufacturers and the wider foodservice industry. It supplies essential ingredients such as seasoning blends, spices, herbs, condiments, coating systems, and complex flavor formulations. These products are delivered directly to clients or through a network of distributors. Founded in 1889, the company maintains its headquarters in Hunt Valley, Maryland.
Financial Metrics — MKC Stock Valuation Data
Revenue/Share (TTM)
$26.45
FCF/Share (TTM)
$3.05
ROIC (TTM)
6.1%
ROE (TTM)
27.3%
P/FCF
16.1x
EV/EBITDA
13.9x
FCF Yield
6.22%
Debt/Equity
0.70x
Based on trailing twelve-month data, MKC shows a free cash flow per share of $3.05 and a ROIC of 6.1%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 16.1x and FCF yield of 6.22% are important context metrics when evaluating MKC's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of MKC?
McCormick & Company, Incorporated currently generates $3.05 in free cash flow per share. At the current price of $48.95, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is MKC undervalued?
MKC trades at a P/FCF ratio of 16.1x with a free cash flow yield of 6.22%. This P/FCF is in a moderate range. However, whether MKC is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value MKC stock using DCF?
To perform a DCF valuation on McCormick & Company, Incorporated: (1) Start with the trailing free cash flow per share ($3.05) as the base, (2) project future FCF growth over 5-10 years based on Packaged Foods industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting MKC's risk profile — with a debt-to-equity of 0.70x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to MKC?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For McCormick & Company, Incorporated, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Packaged Foods trends, then discounting those amounts to today's dollars. MKC's ROIC of 6.1% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect MKC stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For MKC, with a debt-to-equity ratio of 0.70x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 13.9x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See MKC PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Consumer Defensive valuationsDCF and P/E value MKC with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.