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Analyzing McCormick’s Performance with Its Peers

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Oct. 2 2015, Published 1:27 p.m. ET

McCormick and its peers           

An analysis of McCormick’s income statement in 3Q15 follows:

  • The gross profit margins of McCormick & Company (MKC), PepsiCo (PEP), ConAgra Foods (CAG), Tyson Foods (TSN), and Pinnacle Foods (PF) are 39.80%, 55.11%, 25.08%, 9.79%, and 26.77%, respectively.
  • The EPS (earnings per share) of McCormick, PepsiCo, ConAgra, Tyson, and Pinnacle are $0.76, $1.33, $0.38, $0.83, and $0.37, respectively.

An analysis of McCormick’s balance sheet in 3Q15 follows:

  • The current ratios of McCormick, PepsiCo, ConAgra, Tyson, and Pinnacle are 0.97, 1.07, 0.97, 1.39, and 2.05, respectively.

An analysis of McCormick’s valuation follows:

  • The PE (price-to-earnings) ratios of McCormick, PepsiCo, Tyson, and Pinnacle are 23.99x, 21.67x, 16.36x, and 19.12x, respectively.
  • The PBV (price-to-book value) ratios of McCormick, PepsiCo, ConAgra, Tyson, and Pinnacle are 5.87x, 8.48x, 5.25x, 1.83x, and 2.80x, respectively.

According to the above findings, McCormick & Company outperformed its peers based on the gross profit margin, PE ratio, and PBV ratio. However, the peers are way ahead of McCormick based on the current ratio.

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ETFs that invest in McCormick & Company

The Guggenheim S&P Equal Weight Consumer Staples ETF (RHS) invests 2.79% of its holdings in McCormick. RHS tracks an equal-weighted index of large-cap US consumer staples stocks drawn from the S&P 500.

The First Trust Consumer Staples AlphaDEX ETF (FXG) invests 1.89% of its holdings in McCormick. FXG tracks an index of large and mid-cap US consumer staples stocks. The underlying index uses multifactor selection with tiered and equal weighting.

The PowerShares S&P 500 High-Quality Portfolio (SPHQ) invests 1.32% of its holdings in McCormick. SPHQ tracks an index of the highest-quality S&P 500 companies, as defined by the S&P Committee.

Comparing McCormick to its ETFs

An analysis of McCormick’s price movement follows:

  • The YTD (year-to-date) price movements of McCormick, RHS, FXG, and SPHQ are 6.98%, 3.40%, -0.22%, and -4%, respectively.

An analysis of McCormick’s valuation follows:

  • The PE ratios of McCormick, RHS, FXG, and SPHQ are 23.99x, 23.46x, 19.10x, and 18.10x, respectively.
  • The PBV ratios of McCormick, RHS, FXG, and SPHQ are 5.87x, 4.50x, 3.47x, and 3.68x, respectively.

According to the above findings, McCormick & Company outperformed its ETFs based on the price movement, PE ratio, and PBV ratio.

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