McCormick & Company, Incorporated (MKC) Intrinsic Value & DCF Valuation
Packaged Foods · NYSE
Current Price
$45.40
Intrinsic Value
$57.15
+20.6% margin of safety
What Is McCormick & Company, Incorporated's Intrinsic Value?
As of 2026-10-06, the base-case DCF model estimates the intrinsic value of McCormick & Company, Incorporated (MKC) at $57.15 per share, compared with a market price of $45.4, a margin of safety of +20.6%. The base case assumes 7.8% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $44.13 to $72.22. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is McCormick & Company, Incorporated (MKC) Undervalued?
At $45.4, MKC trades about 20.6% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Brand Recognition and Loyalty
McCormick's strong brand equity across spices, seasonings, and flavorings fosters consumer trust and repeat purchases. This deep-rooted recognition creates a significant barrier to entry for new competitors.
↑Extensive Distribution Network
The company's vast and established relationships with retailers and food service providers globally ensure widespread product availability. This logistical advantage is difficult and costly for rivals to replicate.
↑Proprietary Flavor Science Expertise
McCormick's long history and investment in flavor research and development yield unique formulations and sensory experiences. This technical know-how provides a distinct competitive edge in product innovation.
INVESTMENT RISKS
↓Shifting Consumer Preferences
Changes in dietary trends, such as a move towards fresh, less processed foods or specific ethnic cuisines, could reduce demand for certain McCormick products. The company must continuously adapt its portfolio.
↓Supply Chain Disruptions
Global events, climate change, or geopolitical instability can disrupt the sourcing of key ingredients. This can lead to product shortages and increased costs, impacting sales and profitability.
↓Dependence on Key Retail Partners
A significant portion of McCormick's sales are generated through a limited number of large retail customers. Any adverse changes in these relationships could materially impact revenue.
Base case
MKC base case valuation
Intrinsic Value
$57.15
Margin of safety
+20.6%
Expected annual return
+4.7%
Base case assumptions: 7.8% annual growth, 10.0% discount rate, 13.18x exit multiple, 5 year projection. Data as of 2026-10-06.
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)
$28.54
FCF/Share (TTM)
$3.44
ROIC (TTM)
5.7%
ROE (TTM)
22.5%
P/FCF
13.2x
EV/EBITDA
12.3x
FCF Yield
7.59%
Debt/Equity
0.61x
On a trailing twelve-month basis, MKC generates free cash flow per share of $3.44 alongside a ROIC of 5.7%, both central inputs for a DCF valuation. Its P/FCF ratio of 13.2x and FCF yield of 7.59% then frame how MKC is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of MKC?
McCormick & Company, Incorporated currently generates $3.44 in free cash flow per share. At the current price of $45.40, 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 13.2x with a free cash flow yield of 7.59%. A low P/FCF means investors are paying less per dollar of free cash flow; whether that is cheap depends on the company's growth, cyclicality, and capital intensity. 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 ($3.44) 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 0.61x, 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 5.7% means the company's return on invested capital sits below the level that typically clears 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 0.61x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 12.3x, 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 2026-10-06. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.