YUM CHINA HOLDINGS INC (YUMC) Stock Fundamental Analysis
USA - NYSE:YUMC - US98850P1093 - Common Stock
44.69 USD
+0.16 (+0.36%)
44.69 USD
0 (0%)
Taking everything into account, YUMC scores 6 out of 10 in our fundamental rating. YUMC was compared to 133 industry peers in the Hotels, Restaurants & Leisure industry. YUMC is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. YUMC is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
YUMC had positive earnings in the past year.
YUMC had a positive operating cash flow in the past year.
YUMC had positive earnings in each of the past 5 years.
Each year in the past 5 years YUMC had a positive operating cash flow.
1.2 Ratios
YUMC has a better Return On Assets (8.37%) than 80.45% of its industry peers.
The Return On Equity of YUMC (15.87%) is better than 73.68% of its industry peers.
YUMC has a Return On Invested Capital of 10.52%. This is in the better half of the industry: YUMC outperforms 74.44% of its industry peers.
YUMC had an Average Return On Invested Capital over the past 3 years of 8.01%. This is significantly below the industry average of 15.68%.
The last Return On Invested Capital (10.52%) for YUMC is above the 3 year average (8.01%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.37% | ||
| ROE | 15.87% | ||
| ROIC | 10.52% |
ROA(3y)6.27%
ROA(5y)6.7%
ROE(3y)11.88%
ROE(5y)12.46%
ROIC(3y)8.01%
ROIC(5y)7.07%
1.3 Margins
Looking at the Profit Margin, with a value of 8.04%, YUMC is in the better half of the industry, outperforming 67.67% of the companies in the same industry.
In the last couple of years the Profit Margin of YUMC has remained more or less at the same level.
The Operating Margin of YUMC (11.09%) is better than 60.90% of its industry peers.
In the last couple of years the Operating Margin of YUMC has remained more or less at the same level.
With a Gross Margin value of 41.78%, YUMC is not doing good in the industry: 61.65% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of YUMC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.09% | ||
| PM (TTM) | 8.04% | ||
| GM | 41.78% |
OM growth 3Y10.45%
OM growth 5Y1.23%
PM growth 3Y-7.08%
PM growth 5Y-0.16%
GM growth 3Y-0.12%
GM growth 5Y-0.93%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so YUMC is still creating some value.
Compared to 1 year ago, YUMC has less shares outstanding
The number of shares outstanding for YUMC has been increased compared to 5 years ago.
YUMC has a better debt/assets ratio than last year.
2.2 Solvency
YUMC has an Altman-Z score of 3.68. This indicates that YUMC is financially healthy and has little risk of bankruptcy at the moment.
YUMC has a better Altman-Z score (3.68) than 78.20% of its industry peers.
YUMC has a debt to FCF ratio of 0.06. This is a very positive value and a sign of high solvency as it would only need 0.06 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 0.06, YUMC belongs to the best of the industry, outperforming 93.23% of the companies in the same industry.
YUMC has a Debt/Equity ratio of 0.01. This is a healthy value indicating a solid balance between debt and equity.
YUMC's Debt to Equity ratio of 0.01 is amongst the best of the industry. YUMC outperforms 86.47% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.06 | ||
| Altman-Z | 3.68 |
ROIC/WACC1.37
WACC7.69%
2.3 Liquidity
A Current Ratio of 1.39 indicates that YUMC should not have too much problems paying its short term obligations.
YUMC has a better Current ratio (1.39) than 68.42% of its industry peers.
A Quick Ratio of 1.22 indicates that YUMC should not have too much problems paying its short term obligations.
The Quick ratio of YUMC (1.22) is better than 64.66% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.39 | ||
| Quick Ratio | 1.22 |
3. Growth
3.1 Past
YUMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.71%, which is quite good.
Measured over the past 5 years, YUMC shows a small growth in Earnings Per Share. The EPS has been growing by 4.39% on average per year.
The Revenue has been growing slightly by 3.53% in the past year.
Measured over the past years, YUMC shows a small growth in Revenue. The Revenue has been growing by 5.19% on average per year.
EPS 1Y (TTM)15.71%
EPS 3Y24.41%
EPS 5Y4.39%
EPS Q2Q%3.64%
Revenue 1Y (TTM)3.53%
Revenue growth 3Y4.68%
Revenue growth 5Y5.19%
Sales Q2Q%4.03%
3.2 Future
YUMC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 17.97% yearly.
Based on estimates for the next years, YUMC will show a small growth in Revenue. The Revenue will grow by 7.85% on average per year.
EPS Next Y11.26%
EPS Next 2Y12.93%
EPS Next 3Y13.06%
EPS Next 5Y17.97%
Revenue Next Year3.61%
Revenue Next 2Y4.76%
Revenue Next 3Y5.24%
Revenue Next 5Y7.85%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
YUMC is valuated rather expensively with a Price/Earnings ratio of 18.39.
YUMC's Price/Earnings ratio is a bit cheaper when compared to the industry. YUMC is cheaper than 74.44% of the companies in the same industry.
When comparing the Price/Earnings ratio of YUMC to the average of the S&P500 Index (27.20), we can say YUMC is valued slightly cheaper.
A Price/Forward Earnings ratio of 15.04 indicates a correct valuation of YUMC.
73.68% of the companies in the same industry are more expensive than YUMC, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.70. YUMC is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.39 | ||
| Fwd PE | 15.04 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of YUMC indicates a rather cheap valuation: YUMC is cheaper than 85.71% of the companies listed in the same industry.
76.69% of the companies in the same industry are more expensive than YUMC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.76 | ||
| EV/EBITDA | 7.38 |
4.3 Compensation for Growth
YUMC's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of YUMC may justify a higher PE ratio.
A more expensive valuation may be justified as YUMC's earnings are expected to grow with 13.06% in the coming years.
PEG (NY)1.63
PEG (5Y)4.19
EPS Next 2Y12.93%
EPS Next 3Y13.06%
5. Dividend
5.1 Amount
YUMC has a Yearly Dividend Yield of 2.06%. Purely for dividend investing, there may be better candidates out there.
YUMC's Dividend Yield is a higher than the industry average which is at 3.93.
Compared to an average S&P500 Dividend Yield of 2.38, YUMC has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.06% |
5.2 History
The dividend of YUMC has a limited annual growth rate of 5.67%.
YUMC has been paying a dividend for over 5 years, so it has already some track record.
YUMC has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)5.67%
Div Incr Years2
Div Non Decr Years4
5.3 Sustainability
YUMC pays out 32.86% of its income as dividend. This is a sustainable payout ratio.
The dividend of YUMC is growing, but earnings are growing more, so the dividend growth is sustainable.
DP32.86%
EPS Next 2Y12.93%
EPS Next 3Y13.06%
44.69
+0.16 (+0.36%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners88.33%
Inst Owner Change-10.16%
Ins Owners0.35%
Ins Owner Change2.19%
Market Cap16.48B
Analysts84
Price Target59.16 (32.38%)
Short Float %2.16%
Short Ratio3.95
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.06% |
Yearly Dividend0.63
Dividend Growth(5Y)5.67%
DP32.86%
Div Incr Years2
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.08%
Min EPS beat(2)-1.21%
Max EPS beat(2)-0.95%
EPS beat(4)2
Avg EPS beat(4)2.86%
Min EPS beat(4)-1.21%
Max EPS beat(4)11.84%
EPS beat(8)5
Avg EPS beat(8)8.77%
EPS beat(12)8
Avg EPS beat(12)12.56%
EPS beat(16)9
Avg EPS beat(16)285.44%
Revenue beat(2)0
Avg Revenue beat(2)-3.09%
Min Revenue beat(2)-4.1%
Max Revenue beat(2)-2.07%
Revenue beat(4)0
Avg Revenue beat(4)-4.22%
Min Revenue beat(4)-9.31%
Max Revenue beat(4)-1.38%
Revenue beat(8)1
Avg Revenue beat(8)-4%
Revenue beat(12)2
Avg Revenue beat(12)-3.48%
Revenue beat(16)2
Avg Revenue beat(16)-3.28%
PT rev (1m)-0.03%
PT rev (3m)-0.16%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.19%
EPS NY rev (1m)0.82%
EPS NY rev (3m)0.47%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.43%
Revenue NY rev (1m)0.08%
Revenue NY rev (3m)0.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.39 | ||
| Fwd PE | 15.04 | ||
| P/S | 1.44 | ||
| P/FCF | 19.76 | ||
| P/OCF | 11.44 | ||
| P/B | 2.85 | ||
| P/tB | 4.42 | ||
| EV/EBITDA | 7.38 |
EPS(TTM)2.43
EY5.44%
EPS(NY)2.97
Fwd EY6.65%
FCF(TTM)2.26
FCFY5.06%
OCF(TTM)3.91
OCFY8.74%
SpS31.01
BVpS15.7
TBVpS10.11
PEG (NY)1.63
PEG (5Y)4.19
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.37% | ||
| ROE | 15.87% | ||
| ROCE | 14.37% | ||
| ROIC | 10.52% | ||
| ROICexc | 13.92% | ||
| ROICexgc | 20.13% | ||
| OM | 11.09% | ||
| PM (TTM) | 8.04% | ||
| GM | 41.78% | ||
| FCFM | 7.29% |
ROA(3y)6.27%
ROA(5y)6.7%
ROE(3y)11.88%
ROE(5y)12.46%
ROIC(3y)8.01%
ROIC(5y)7.07%
ROICexc(3y)10.81%
ROICexc(5y)10.5%
ROICexgc(3y)15.53%
ROICexgc(5y)15.57%
ROCE(3y)11.07%
ROCE(5y)9.74%
ROICexcg growth 3Y8.41%
ROICexcg growth 5Y-4.9%
ROICexc growth 3Y14.1%
ROICexc growth 5Y-7.31%
OM growth 3Y10.45%
OM growth 5Y1.23%
PM growth 3Y-7.08%
PM growth 5Y-0.16%
GM growth 3Y-0.12%
GM growth 5Y-0.93%
F-Score8
Asset Turnover1.04
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.06 | ||
| Debt/EBITDA | 0.03 | ||
| Cap/Depr | 131.74% | ||
| Cap/Sales | 5.3% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 83.33% | ||
| Profit Quality | 90.75% | ||
| Current Ratio | 1.39 | ||
| Quick Ratio | 1.22 | ||
| Altman-Z | 3.68 |
F-Score8
WACC7.69%
ROIC/WACC1.37
Cap/Depr(3y)139.21%
Cap/Depr(5y)128.85%
Cap/Sales(3y)6.6%
Cap/Sales(5y)6.37%
Profit Quality(3y)112.23%
Profit Quality(5y)94%
High Growth Momentum
Growth
EPS 1Y (TTM)15.71%
EPS 3Y24.41%
EPS 5Y4.39%
EPS Q2Q%3.64%
EPS Next Y11.26%
EPS Next 2Y12.93%
EPS Next 3Y13.06%
EPS Next 5Y17.97%
Revenue 1Y (TTM)3.53%
Revenue growth 3Y4.68%
Revenue growth 5Y5.19%
Sales Q2Q%4.03%
Revenue Next Year3.61%
Revenue Next 2Y4.76%
Revenue Next 3Y5.24%
Revenue Next 5Y7.85%
EBIT growth 1Y15.48%
EBIT growth 3Y15.62%
EBIT growth 5Y6.49%
EBIT Next Year57.15%
EBIT Next 3Y22.99%
EBIT Next 5Y19.52%
FCF growth 1Y-21.62%
FCF growth 3Y17.33%
FCF growth 5Y-0.98%
OCF growth 1Y-16.67%
OCF growth 3Y7.85%
OCF growth 5Y3.67%