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McCormick & Company: Rise in Revenue and Net Income

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McCormick’s price movement

McCormick & Company (MKC) has a market cap of $10.52 billion. McCormick’s YTD (year-to-date) price movement has been rising day by day with the rise in the revenue and net income every quarter. After the earnings report in 3Q15, McCormick fell by 4.26% and closed at $78.68 per share as of October 1, 2015. The price movement on a weekly, monthly, and YTD basis is -5.38%, 1.38%, and 6.98%, respectively. It’s trading at -5.69% on a trailing five-day basis.

Technically, McCormick has broken the support. It’s trading below the 20-day and 50-day moving averages. Currently, it’s trading at -3.54% below the 20-day moving average, -3.57% below the 50-day moving average, and 1.89% above the 200-day moving average.

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. RHS’s YTD price movement was 3.40% as of September 30, 2015.

McCormicks’ competitors and their market caps are:

  • PepsiCo (PEP) – $137.86 billion
  • ConAgra Foods (CAG) – $17.66 billion
  • Tyson Foods (TSN) – $16.35 billion
  • Pinnacle Foods (PF) – $4.90 billion
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McCormick’s performance in 3Q15

The company reported net revenue of $1,059.9 million in 3Q15—a rise of 3.49% compared to net revenue of $1,024.1 million in 2Q15. The net income and EPS (earnings per share) rose to $97.6 million and $0.76 per share in 3Q15—a rise of 15.77% and 16.92%, respectively, on a quarterly basis. The cash and cash equivalents and accounts receivable rose by 21.11% and 8.26%, respectively, in 3Q15. The current ratio fell to 0.97 in 3Q15—compared to the current ratio of 1.01 in 2Q15. The debt-to-equity ratio rose by 1.31% in 3Q15.

In 3Q15, some of McCormick’s key activities are:

  • McCormick is introducing 11 new products. The products include slow cooker sauces, gluten-free recipe mixes, and roasted vegetable stock cubes that boost flavor in soups, stews, and risottos.
  • The company announced a quarterly dividend of $0.40 per share on McCormick’s common stocks.
  • The company completed the purchase of 100% of the shares of One World Foods. It sells Stubb’s barbecue sauces. It’s a privately-held company located in Austin, Texas.

About McCormick 

McCormick & Company is a flavor company. It manufactures, markets, and distributes spices, seasoning mixes, condiments, and other flavorful products to retail outlets, food manufacturers, and food service businesses.

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