YUM CHINA HOLDINGS INC (YUMC) Stock Fundamental Analysis
USA - NYSE:YUMC - US98850P1093 - Common Stock
43.26 USD
-0.44 (-1.01%)
43.5 USD
+0.24 (+0.55%)
YUMC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 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 has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year YUMC was profitable.
In the past year YUMC had a positive cash flow from operations.
In the past 5 years YUMC has always been profitable.
YUMC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 8.37%, YUMC is in the better half of the industry, outperforming 79.70% of the companies in the same industry.
Looking at the Return On Equity, with a value of 15.87%, YUMC is in the better half of the industry, outperforming 73.68% of the companies in the same industry.
YUMC's Return On Invested Capital of 10.52% is fine compared to the rest of the industry. YUMC outperforms 74.44% of its industry peers.
The Average Return On Invested Capital over the past 3 years for YUMC is below the industry average of 10.67%.
The 3 year average ROIC (8.01%) for YUMC is below the current ROIC(10.52%), indicating increased profibility in the last year.
| 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
With a decent Profit Margin value of 8.04%, YUMC is doing good in the industry, outperforming 68.42% of the companies in the same industry.
YUMC's Profit Margin has been stable in the last couple of years.
The Operating Margin of YUMC (11.09%) is better than 60.90% of its industry peers.
YUMC's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 41.78%, YUMC is doing worse than 60.90% of the companies in the same industry.
YUMC's Gross Margin has been stable in the last couple of years.
| 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.
The number of shares outstanding for YUMC has been reduced compared to 1 year ago.
YUMC has more shares outstanding than it did 5 years ago.
The debt/assets ratio for YUMC has been reduced compared to a year ago.
2.2 Solvency
YUMC has an Altman-Z score of 3.64. This indicates that YUMC is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.64, YUMC belongs to the top of the industry, outperforming 81.95% of the companies in the same industry.
The Debt to FCF ratio of YUMC is 0.06, which is an excellent value as it means it would take YUMC, only 0.06 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 0.06, YUMC belongs to the best of the industry, outperforming 93.98% 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.
The Debt to Equity ratio of YUMC (0.01) is better than 87.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.06 | ||
| Altman-Z | 3.64 |
ROIC/WACC1.41
WACC7.47%
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 67.67% of its industry peers.
YUMC has a Quick Ratio of 1.22. This is a normal value and indicates that YUMC is financially healthy and should not expect problems in meeting its short term obligations.
YUMC has a Quick ratio of 1.22. This is in the better half of the industry: YUMC outperforms 63.91% 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.
The Earnings Per Share has been growing slightly by 4.39% on average over the past years.
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
Based on estimates for the next years, YUMC will show a quite strong growth in Earnings Per Share. The EPS will grow by 17.97% on average per year.
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 Y10.84%
EPS Next 2Y12.77%
EPS Next 3Y12.51%
EPS Next 5Y17.97%
Revenue Next Year3.57%
Revenue Next 2Y4.7%
Revenue Next 3Y5.22%
Revenue Next 5Y7.85%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
YUMC is valuated rather expensively with a Price/Earnings ratio of 17.80.
71.43% of the companies in the same industry are more expensive than YUMC, based on the Price/Earnings ratio.
YUMC's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.10.
Based on the Price/Forward Earnings ratio of 14.60, the valuation of YUMC can be described as correct.
Based on the Price/Forward Earnings ratio, YUMC is valued a bit cheaper than the industry average as 72.18% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of YUMC to the average of the S&P500 Index (22.52), we can say YUMC is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.8 | ||
| Fwd PE | 14.6 |
4.2 Price Multiples
YUMC's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. YUMC is cheaper than 81.20% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of YUMC indicates a somewhat cheap valuation: YUMC is cheaper than 73.68% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.13 | ||
| EV/EBITDA | 7.2 |
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 12.51% in the coming years.
PEG (NY)1.64
PEG (5Y)4.06
EPS Next 2Y12.77%
EPS Next 3Y12.51%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.22%, YUMC has a reasonable but not impressive dividend return.
YUMC's Dividend Yield is a higher than the industry average which is at 4.01.
Compared to an average S&P500 Dividend Yield of 2.35, YUMC has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
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.
YUMC's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP32.86%
EPS Next 2Y12.77%
EPS Next 3Y12.51%
43.26
-0.44 (-1.01%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners85.04%
Inst Owner Change-0.03%
Ins Owners0.36%
Ins Owner Change2.19%
Market Cap15.95B
Revenue(TTM)11.43B
Net Income(TTM)919.00M
Analysts84
Price Target59.02 (36.43%)
Short Float %1.75%
Short Ratio3.75
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
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)-0.24%
PT rev (3m)-0.26%
EPS NQ rev (1m)-4.99%
EPS NQ rev (3m)-4.64%
EPS NY rev (1m)-0.11%
EPS NY rev (3m)0.44%
Revenue NQ rev (1m)-0.03%
Revenue NQ rev (3m)0.18%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)0.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.8 | ||
| Fwd PE | 14.6 | ||
| P/S | 1.4 | ||
| P/FCF | 19.13 | ||
| P/OCF | 11.08 | ||
| P/B | 2.76 | ||
| P/tB | 4.28 | ||
| EV/EBITDA | 7.2 |
EPS(TTM)2.43
EY5.62%
EPS(NY)2.96
Fwd EY6.85%
FCF(TTM)2.26
FCFY5.23%
OCF(TTM)3.91
OCFY9.03%
SpS31.01
BVpS15.7
TBVpS10.11
PEG (NY)1.64
PEG (5Y)4.06
Graham Number29.3
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%
ROICexgc growth 3Y8.41%
ROICexgc 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 | 3.64 |
F-Score8
WACC7.47%
ROIC/WACC1.41
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 Y10.84%
EPS Next 2Y12.77%
EPS Next 3Y12.51%
EPS Next 5Y17.97%
Revenue 1Y (TTM)3.53%
Revenue growth 3Y4.68%
Revenue growth 5Y5.19%
Sales Q2Q%4.03%
Revenue Next Year3.57%
Revenue Next 2Y4.7%
Revenue Next 3Y5.22%
Revenue Next 5Y7.85%
EBIT growth 1Y15.48%
EBIT growth 3Y15.62%
EBIT growth 5Y6.49%
EBIT Next Year58.16%
EBIT Next 3Y22.88%
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%
YUM CHINA HOLDINGS INC / YUMC FAQ
What is the ChartMill fundamental rating of YUM CHINA HOLDINGS INC (YUMC) stock?
ChartMill assigns a fundamental rating of 6 / 10 to YUMC.
What is the valuation status of YUM CHINA HOLDINGS INC (YUMC) stock?
ChartMill assigns a valuation rating of 5 / 10 to YUM CHINA HOLDINGS INC (YUMC). This can be considered as Fairly Valued.
Can you provide the profitability details for YUM CHINA HOLDINGS INC?
YUM CHINA HOLDINGS INC (YUMC) has a profitability rating of 6 / 10.
Can you provide the expected EPS growth for YUMC stock?
The Earnings per Share (EPS) of YUM CHINA HOLDINGS INC (YUMC) is expected to grow by 10.84% in the next year.
Can you provide the dividend sustainability for YUMC stock?
The dividend rating of YUM CHINA HOLDINGS INC (YUMC) is 5 / 10 and the dividend payout ratio is 32.86%.