How does MKC's internationalization process compare with that of Avon or other cosmetics marketers who have expanded abroad? Should MKC focus on salvaging its poor performance in its current markets before taking on the new challenge of expanding to new markets? Does MKC have a global expansion strategy?
Summary McCormick owns a fantastic brand name, and the company is the king of spices and seasonings. Its first-quarter results were solid across the board, and its margins expanded during the period, suggesting it is doing well against private-label competition.
Over the long haul, however, we think McCormick might be challenged by private-label offerings and its debt load that has swollen considerably in recent years. Of course we love McCormick, its strong free cash flow coverage of the dividend, its dividend track record, but risks are mounting.
Its products are found in retail outlets, and it offers its flavorful offerings to food makers and the foodservice business. The company operates in two business segments -- consumer and flavor solutions. It was founded in and is based in Maryland.
The closing of recent acquisitions, new products and a re-launch of its gourmet line should help performance. Increased demand for snack seasonings and strong growth from fast-food restaurants across the globe are other key drivers.
Performance continues to move in the right direction at the spice-making giant. McCormick remains quite resilient, however, and the global demand for flavor is large and growing across the world. Millennials and generation Z those aged may offer continued growth opportunities in coming years.
In any case, McCormick has nice coverage of the dividend with free cash flow. However, its Dividend Cushion ratio could be much better. The company has a long history of returning cash to its shareholders, having paid a dividend every year sincebut it has increased its dividend significantly in the past decade.
McCormick faces risks that could ultimately impact dividend growth, however. The company could lose potential revenue if a significant portion of consumers switch to private-label offerings or lower-priced competitive offerings during times of economic weakness.
McCormick is not unaffected by volatility in commodity prices. If prices of key inputs are to increase significantly, it could have a material impact on levels of profitability. The recent acquisition of RB Foods has bloated its balance sheet and impacted its Dividend Cushion ratio.
The company is trading at about the high end of the fair value range at the moment, and while we love its dividend growth track record, risks are increasing to the story.
It does have the strong brand name and dividend growth track record to turn a great many heads, however. This article or report and any links within are for information purposes only and should not be considered a solicitation to buy or sell any security.
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It's not that hard to believe why McCormick has been so successful either. Who doesn't want to find the flavors they love to taste -- and McCormick offers a whole bunch to consumers. Why has Mary Kay Cosmetics (MKC) not been as successful as Question Read and carefully consider the Mary Kay Cosmetics: Asian Market Entry (A) case, addressing the following questions.
MKC would also be fighting to take shareholders from other companies. 1 million had already been spent just in preparation for the market entry. China on the other hand had never had never been introduced to the party plan approach and MKC would be the first to attempt using it.
View Notes - MKC Case Questions from BUSINESS MGMT at Texas A&M University. Sterling Mark Charles Smith Lanique Lindley Mary Kay Cosmetics Case Study Why has MKC not been %(9).
Read and carefully consider the Mary Kay Cosmetics: Asian Market Entry (A) case, addressing the following questions. Support your analysis with facts and .