McCormick & Company, Incorporated (MKC) Stock Valuation — PE Analysis
Packaged Foods · NYSE
Current Price
$45.25
PE Ratio (TTM)
8.2x
Intrinsic Value
$67.07
+32.5% margin of safety
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 PE valuation
At a current price of $45.25, the base case PE valuation puts MKC fair value near $67.07 per share. That figure assumes 7.8% yearly earnings growth, a target PE multiple of 8.12x, and a 10% discount rate.
Intrinsic Value
$67.07
Margin of safety
+32.5%
Expected annual return
+8.2%
Base case assumptions: 7.8% annual earnings growth, 8.12x target PE, 10% discount rate, 5 year projection. Data as of 2026-10-07.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the MKC PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for McCormick & Company, Incorporated respond.
Open PE 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 PE Stock Valuation Data
PE Ratio (TTM)
8.2x
PEG Ratio
0.09
Earnings Yield
12.31%
ROE (TTM)
22.5%
Revenue/Share (TTM)
$28.54
Dividend Yield
4.14%
Debt/Equity
0.61x
Frequently Asked Questions
What is the PE ratio of MKC?
The trailing twelve-month PE ratio of MKC reflects how much investors pay per dollar of McCormick & Company, Incorporated's earnings. This metric is most useful when compared to Packaged Foods peers and the company's own historical range.
Is MKC overvalued based on PE ratio?
MKC's PE of 8.2x combined with a PEG ratio of 0.09 provides a growth-adjusted perspective. A PEG below 1.0 means the P/E is low relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Packaged Foods, a DCF analysis may be more appropriate.
How do I value MKC stock using PE ratio?
To value McCormick & Company, Incorporated using PE: (1) Compare the current PE (8.2x) against the Packaged Foods median to assess relative pricing, (2) check the PEG ratio (0.09) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of MKC?
MKC's PEG ratio is 0.09, calculated by dividing the PE ratio (8.2x) by the expected earnings growth rate. A PEG below 1.0 means the P/E is low relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for MKC stock valuation?
PE ratio gives a quick relative read — how MKC is priced versus Packaged Foods peers. DCF provides an absolute value based on projected free cash flows. For MKC, with a strong ROE of 22.5%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See MKC DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Consumer Defensive valuationsP/E and DCF value MKC with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-10-07. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.