Should you consider YUM CHINA HOLDINGS INC (NYSE:YUMC) for quality investing?

Quality investors are looking for the best of the best. Companies which are growing steadily and consistently, but are also in excellent financial condition. We will have a look here to see if YUM CHINA HOLDINGS INC (NYSE:YUMC) is suited for quality investing. Investors should of course do their own research, but we spotted YUM CHINA HOLDINGS INC showing up in our Caviar Cruise quality screen, so it may be worth spending some more time on it.

Highlighting Notable Quality Metrics of YUMC.

• Over the past 5 years, YUMC has experienced impressive revenue growth, with 5.19% increase. This demonstrates the company's ability to effectively expand its top line and suggests a positive outlook for future revenue generation.
• With a robust ROIC excluding cash and goodwill at 17.25%, YUMC showcases its effective allocation of capital and operational excellence. This metric signifies the company's ability to generate attractive returns and supports its long-term financial performance.
• With a Debt/Free Cash Flow Ratio of 0.25, YUMC exhibits solid financial health and responsible debt management practices. This ratio indicates the company's ability to generate ample free cash flow to meet its debt obligations and pursue growth opportunities.
• YUMC demonstrates consistent Profit Quality over the past 5 years, with a strong 94.0%. This indicates the company's ability to generate sustainable and reliable profits, showcasing its long-term profitability and financial stability.
• YUMC has demonstrated consistent growth in EBIT over the past 5 years, with a strong 6.49%. This signifies the company's ability to generate sustainable earnings and reflects its positive financial trajectory.
• YUMC demonstrates a remarkable trend where its EBIT 5-year growth exceeds its Revenue 5-year growth. This indicates the company's ability to enhance its profitability through improved cost control and operational efficiency.

How does the complete fundamental picture look for YUMC?

ChartMill assigns a Fundamental Rating to every stock. This score ranges from 0 to 10 and is updated daily. The score is determined by evaluating multiple fundamental indicators and properties.

Overall YUMC gets a fundamental rating of 6 out of 10. We evaluated YUMC against 134 industry peers in the Hotels, Restaurants & Leisure industry. While YUMC has a great health rating, its profitability is only average at the moment. YUMC is not valued too expensively and it also shows a decent growth rate.

Our latest full fundamental report of YUMC contains the most current fundamental analsysis.

Our Caviar Cruise screen will find you more ideas suited for quality investing.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.