Updated 6/2/25
McCormick & Company (NYSE: MKC) has built its reputation as a global leader in flavor through a resilient mix of consumer staples and industrial food solutions. With a presence in over 150 countries and a brand portfolio that includes pantry mainstays like Old Bay and Lawry’s, McCormick continues to deliver steady performance across market cycles. The company’s 38-year streak of dividend increases and free cash flow topping $649 million in the trailing 12 months speaks to its long-term financial discipline.
Recent Events
McCormick’s most recent earnings update didn’t turn many heads, but that’s not necessarily a bad thing. Revenue was essentially flat, inching up just 0.2% compared to last year. Earnings were down a bit, with a 2.2% dip, but the company continues to operate with solid efficiency. Net margins remain healthy at 11.7%, and operating margins are holding at 14.1%.
Inflation and raw material costs have been pressing on food manufacturers, but McCormick has used its pricing power to stay ahead of those challenges. While volume softness is noticeable, particularly in the industrial segment, its core consumer business continues to perform steadily. Pantry staples may not be glamorous, but people still reach for them in good times and bad.
What’s more encouraging is that McCormick has continued to chip away at its debt. The total debt-to-equity ratio now stands at 79%, down from higher levels seen in past quarters. Management reaffirmed its full-year guidance and hasn’t wavered in its approach to returning value to shareholders, which is what dividend-focused investors like to hear.
Key Dividend Metrics
📈 Forward Dividend Yield: 2.47%
💰 Forward Annual Dividend Rate: $1.80
📆 Most Recent Dividend Date: April 21, 2025
🔒 Payout Ratio: 58.97%
📊 5-Year Average Dividend Yield: 1.80%
🔁 Dividend Growth Streak: 38 consecutive years
📉 Dividend CAGR (10-Year Estimate): ~8%
🔎 Free Cash Flow (TTM): $535M
🏦 Current Ratio: 0.65
These numbers point to a business that doesn’t just pay a dividend—it’s built around sustaining and growing it.
Dividend Overview
Right now, McCormick’s yield sits just under 2.5%. It’s not the kind of yield that jumps off the screen, but that’s not the game McCormick is playing. This company has been rewarding shareholders for decades, with a quiet determination that’s become a hallmark of its culture.
The forward dividend rate of $1.80 per share is supported by robust free cash flow and a manageable payout ratio under 60%. That leaves room for future increases, reinvestment into the business, and the flexibility to navigate bumps along the economic road.
The company has been increasing its dividend for 38 straight years. That’s more than just consistency—it’s a statement of long-term discipline. The latest dividend was paid out in April, and with quarterly distributions on autopilot, investors can count on a predictable income stream.
One of the things that stands out about McCormick’s dividend profile is how sustainable it feels. There’s no sense of a stretch or a need to sacrifice financial health to keep the dividend intact. Instead, it feels earned—backed by decades of operational stability and cash flow strength.
Dividend Growth and Safety
The question of dividend safety is always at the top of any income investor’s list—and with McCormick, the answer is pretty straightforward. The dividend looks solid, and the company has room to grow it.
The payout ratio is comfortably below the danger zone, and the company generates nearly $900 million in operating cash flow. Even after accounting for capital expenditures, there’s more than enough left over to cover the dividend. Free cash flow sits north of $500 million, which gives McCormick a healthy buffer.
Debt is still part of the story, with over $4.3 billion on the books, and cash reserves remain low. The current ratio of 0.65 suggests liquidity could tighten if things turn south, but the overall balance sheet doesn’t raise any red flags. As long as cash flow stays steady—and there’s no reason to expect it won’t—the dividend should remain well-supported.
McCormick’s long track record of dividend increases speaks for itself. Over the last decade, the company has averaged an estimated dividend growth rate of around 8%. While future increases may come in a bit slower if earnings growth stays muted, the underlying commitment to growing the payout remains strong.
Another thing working in McCormick’s favor is its business model. The company sells staples—spices, seasonings, sauces—the kind of things consumers buy regardless of economic cycles. That creates a built-in stability that makes its dividend even more attractive when markets get shaky.
There’s no drama here, and that’s the appeal. McCormick isn’t trying to reinvent itself every quarter. It’s a company that knows its niche, serves it well, and takes care of its shareholders along the way. For dividend investors, especially those who appreciate reliability and a slow, steady climb, that’s exactly what you want in your portfolio.
Cash Flow Statement
McCormick’s trailing 12-month cash flow highlights a business generating steady internal capital despite headwinds. Operating cash flow came in at $899 million, slightly down from the prior year’s $921.9 million but still healthy. It reflects strong core operations, especially given soft volume trends and cost inflation pressures. Capital expenditures totaled $250 million, leading to free cash flow of $649 million. That’s a modest year-over-year gain, showing tight but efficient spending and a continued focus on disciplined reinvestment.
On the financing side, cash outflows were heavier, with $798.5 million used for debt repayment, nearly doubling the level from two years ago. The company continues to reduce leverage steadily. Share repurchases also ticked up modestly. Cash from investing activities remains negative, largely from consistent capital expenditures. The net effect left the company with $162.1 million in cash at the end of the period, slightly down from last year. Taken together, McCormick is managing a balanced approach—maintaining strong free cash flow, cutting debt, and keeping just enough liquidity on hand without overextending.
Analyst Ratings
📈 McCormick & Company (NYSE: MKC) has recently seen a variety of analyst moves that reflect both optimism and caution around the stock.
👍 On January 8, 2025, TD Cowen upgraded McCormick from “Hold” to “Buy”, citing signs of improved operational efficiency and a more stable pricing environment. Analysts noted that the company appears to be regaining momentum in its consumer segment, especially as cost inflation pressures begin to ease.
📊 Jefferies also shifted to a more positive stance in December 2024, lifting its rating to “Buy” while pointing to McCormick’s dependable cash flow, strong brand equity, and attractive long-term positioning within the consumer staples sector.
⚠️ Not all sentiment is upbeat, however. Argus downgraded the stock from “Buy” to “Hold” on March 27, 2025. The firm expressed concerns about weaker earnings growth and some softness in the industrial segment. There was also commentary around margin compression, with expectations that near-term profitability could face some pressure.
🔁 Barclays maintained its “Equal-Weight” rating but revised its price target to $82, signaling a wait-and-see approach as the stock trades sideways in the face of mixed fundamentals.
🎯 The current consensus price target for MKC stands at $85.57. That’s a modest upside from recent trading levels near $72, with the analyst range spanning from a cautious $69 to a more bullish $101.
Earning Report Summary
Sales Holding Steady, Growth Mixed Across Segments
McCormick’s first quarter of fiscal 2025 was a bit of a mixed bag. Net sales came in at $1.61 billion, about the same as last year. That stability, though, masks some movement underneath. Organic sales managed a 2% lift, thanks mostly to better volume and mix. Pricing, however, pulled in the other direction and dampened some of that growth.
In the Consumer segment, sales held at $919 million. Volume actually improved by 3%, but that was offset by a 2% dip in pricing. On the Flavor Solutions side, the story was a bit better—sales nudged up 1% to $686 million, with organic growth at 3%. That gain came from both volume and pricing contributing, albeit modestly.
Earnings Dip Slightly as Costs Rise
Earnings per share landed at 60 cents, down a bit from the year before and short of what analysts were expecting. Adjusted EPS dropped 5%. McCormick pointed to higher spending on marketing and technology, along with more aggressive promotions aimed at keeping its products moving off shelves. While that kind of investment might weigh on profits now, it’s part of a bigger effort to hold market share in a highly competitive food industry.
Leadership Keeps Focus on Long-Term Strategy
CEO Brendan Foley acknowledged that the operating environment is still challenging, but said results were in line with what the company had planned. He reaffirmed that McCormick is staying focused on its key growth drivers—things like category management, brand building, and pushing innovation in flavor products. There’s also a big push toward reformulating products to match what today’s consumers are looking for, including cutting artificial ingredients and lowering sodium in several offerings.
Guidance Reaffirmed with a Measured Outlook
Looking ahead, McCormick stuck with its guidance for the full year. It’s forecasting modest sales growth—between flat and 2% on a reported basis, and a slightly better 1 to 3% when excluding currency swings. For earnings, the company expects GAAP EPS in the $2.99 to $3.04 range, with adjusted EPS just a bit higher at $3.03 to $3.08.
One challenge on the horizon is the tariff situation on imports from China. McCormick has plans in place to handle that, including targeted price adjustments and internal cost savings. Leadership seems confident those strategies will help cushion the impact while still delivering value to customers and shareholders alike.
Management Team
McCormick & Company is led by an experienced leadership team with deep roots in the food industry. Brendan M. Foley serves as Chairman, President, and CEO. He joined McCormick in 2014 and has held various leadership roles, including President of U.S. Consumer and President of Global Consumer – Americas and Asia. Prior to McCormick, Foley spent 15 years at H.J. Heinz, culminating in his role as President for the North America Zone. His earlier background at General Mills shaped his expertise in brand strategy and consumer engagement.
Marcos Gabriel, appointed as Executive Vice President and CFO effective December 1, 2024, brings international financial expertise to the role. Since joining McCormick in 2017, Gabriel has driven improvements in sales, profit, and cash flow while also leading major process changes. His previous experience spans finance leadership roles at Avon Products, Unilever, and Eli Lilly across different global markets. Gabriel holds a Bachelor of Arts in Economics from Mackenzie University and an MBA in Finance from the University of São Paulo.
The Board of Directors is composed of professionals with diverse experience across business, finance, and public service. Members include Anne Bramman, former Chief Financial and Growth Officer at Circana; Michael Conway, former CEO of Starbucks North America; and Gary M. Rodkin, former CEO of ConAgra Foods. Their varied backgrounds support McCormick’s governance and long-term strategy.
Valuation and Stock Performance
McCormick’s stock (NYSE: MKC) most recently closed at $72.73. Over the past year, the stock has moved between a high of $86.24 and a low of $66.88. While currently trading below its 52-week high, recent performance has shown some stability, with a modest gain year-to-date. Trading volume has picked up recently, with daily volume exceeding the 50-day average, pointing to increased investor interest.
From a valuation standpoint, the company’s P/E ratio sits at 24.9, above the average for its industry. This premium valuation reflects market confidence in the brand’s long-term stability and pricing power. McCormick’s EV/Revenue is 3.5, and its EV/EBITDA stands at 18.8. While these figures indicate the stock is priced higher than peers, it aligns with McCormick’s reputation as a consistent performer with strong cash flow generation.
Analyst sentiment is cautiously optimistic, with a consensus 12-month price target of $82.67. Individual estimates vary, with targets ranging from $67 on the low end to $101 at the top. That spread reflects differing views on the pace of margin recovery and future growth, but overall the sentiment is anchored in confidence about the business model.
Risks and Considerations
There are several factors that investors should keep in mind when evaluating McCormick. The company is exposed to commodity price swings, particularly in the cost of spices and herbs. These raw materials can be highly volatile, and sustained increases could put pressure on margins unless fully offset through pricing or cost management strategies.
Currency risk is another ongoing consideration. Nearly 40 percent of McCormick’s revenue comes from international markets, so exchange rate movements can significantly influence financial results. Recent macroeconomic uncertainty and interest rate shifts have heightened this exposure.
McCormick also faces regulatory challenges, particularly related to trade policies and tariffs. The recent changes in U.S.-China tariffs have forced the company to adjust pricing and revisit cost structures. While McCormick has laid out plans to navigate these disruptions, any escalation in trade disputes could create more uncertainty.
On the consumer front, the industry is in the midst of a shift toward cleaner labels and healthier ingredients. McCormick has responded by reformulating many products, cutting artificial additives, and lowering sodium. While these changes align with demand trends, they also require ongoing investment in research and development. Failing to keep pace with evolving preferences could put customer loyalty at risk.
Competition is always present in the food space, especially from both legacy brands and emerging niche players. Staying relevant in such a dynamic environment requires consistent innovation, strong distribution partnerships, and a clear brand message.
Final Thoughts
McCormick & Company remains one of the more dependable names in the consumer staples sector. With a global footprint and a diversified portfolio of well-known brands, the company has built a reputation for delivering steady results in both strong and soft economic conditions. Its leadership team continues to emphasize long-term strategy, disciplined execution, and adapting to changing market trends.
While the stock is priced at a premium, that’s largely a reflection of its consistent free cash flow, dividend reliability, and operational resilience. Risks do exist, from commodity pricing to global trade and evolving consumer tastes, but McCormick appears well-positioned to handle these headwinds.
For investors seeking long-term stability with a reliable dividend, McCormick continues to offer a foundation that’s stood the test of time. The company’s commitment to innovation and operational discipline suggests that while growth may not be explosive, it remains steady and grounded in fundamentals.