As of November 4, 2025, McCormick & Company Inc's estimated intrinsic value ranges from $29.39 to $112.08 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $112.08 | +75.6% |
| Discounted Cash Flow (5Y) | $90.46 | +41.7% |
| Dividend Discount Model (Multi-Stage) | $70.91 | +11.1% |
| Dividend Discount Model (Stable) | $61.41 | -3.8% |
| Earnings Power Value | $29.39 | -54.0% |
Is McCormick & Company Inc (MKC) undervalued or overvalued?
With the current market price at $63.84, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate McCormick & Company Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.43 | 0.48 |
| Cost of equity | 5.8% | 7.5% |
| Cost of debt | 4.0% | 5.1% |
| Tax rate | 20.6% | 21.1% |
| Debt/Equity ratio | 0.25 | 0.25 |
| After-tax WACC | 5.3% | 6.8% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $90 | $28,540M | 84.7% |
| 10-Year Growth | $112 | $34,344M | 71.6% |
| 5-Year EBITDA | $48 | $17,106M | 74.5% |
| 10-Year EBITDA | $68 | $22,528M | 56.6% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $725M |
| Discount Rate (WACC) | 6.8% - 5.3% |
| Enterprise Value | $10,631M - $13,671M |
| Net Debt | $4,263M |
| Equity Value | $6,368M - $9,407M |
| Outstanding Shares | 268M |
| Fair Value | $24 - $35 |
| Selected Fair Value | $29.39 |
| Metric | Value |
|---|---|
| Market Capitalization | $17133M |
| Enterprise Value | $21397M |
| Trailing P/E | 22.02 |
| Forward P/E | 21.77 |
| Trailing EV/EBITDA | 8.70 |
| Current Dividend Yield | 275.80% |
| Dividend Growth Rate (5Y) | 8.11% |
| Debt-to-Equity Ratio | 0.25 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $33.62 |
| Discounted Cash Flow (5Y) | 25% | $22.61 |
| Dividend Discount Model (Multi-Stage) | 20% | $14.18 |
| Dividend Discount Model (Stable) | 15% | $9.21 |
| Earnings Power Value | 10% | $2.94 |
| Weighted Average | 100% | $82.57 |
Based on our comprehensive valuation analysis, McCormick & Company Inc's intrinsic value is $82.57, which is approximately 29.3% above the current market price of $63.84.
Key investment considerations:
Given these factors, we believe McCormick & Company Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.