Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
We have spent a lifetime looking for wonderful businesses run by able and honest people, bought at sensible prices, and then sitting still. McCormick is a genuinely good business — the dominant name in spices and seasonings, a company that has paid a dividend every year since 1925 and raised it for 40 straight years. Six months ago we might have called it a fine, sleepy compounder trading too dear. But on March 31, 2026, management did something that changes the entire calculus: it agreed to merge with Unilever's Foods business in a $44.8 billion transaction that loads the balance sheet toward four times EBITDA and dilutes today's McCormick owners down to roughly 35% of a far larger, far more leveraged enterprise. We have seen this movie before — it was called Kraft Heinz, and we paid full price to watch it. A decent franchise is being put at risk to chase scale and synergies.
Recent filings analysed: 8-K (2026-08-28), 8-K (2026-06-25), 10-Q (2026-06-25), 8-K (2026-05-26).
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