YUM CHINA HOLDINGS INC (YUMC) Stock Fundamental Analysis
NYSE:YUMC - New York Stock Exchange, Inc. - US98850P1093 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to YUMC. YUMC was compared to 135 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
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.
Each year in the past 5 years YUMC had a positive operating cash flow.
1.2 Ratios
YUMC's Return On Assets of 8.33% is fine compared to the rest of the industry. YUMC outperforms 79.26% of its industry peers.
YUMC's Return On Equity of 15.84% is fine compared to the rest of the industry. YUMC outperforms 74.07% of its industry peers.
The Return On Invested Capital of YUMC (10.08%) is better than 74.07% 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 13.81%.
The 3 year average ROIC (8.01%) for YUMC is below the current ROIC(10.08%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.33% | ||
| ROE | 15.84% | ||
| ROIC | 10.08% |
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
YUMC has a better Profit Margin (8.09%) than 64.44% of its industry peers.
YUMC's Profit Margin has been stable in the last couple of years.
Looking at the Operating Margin, with a value of 10.87%, YUMC is in line with its industry, outperforming 56.30% of the companies in the same industry.
In the last couple of years the Operating Margin of YUMC has remained more or less at the same level.
YUMC's Gross Margin of 41.90% is on the low side compared to the rest of the industry. YUMC is outperformed by 61.48% of its industry peers.
YUMC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.87% | ||
| PM (TTM) | 8.09% | ||
| GM | 41.9% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), YUMC is 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
An Altman-Z score of 3.77 indicates that YUMC is not in any danger for bankruptcy at the moment.
YUMC's Altman-Z score of 3.77 is amongst the best of the industry. YUMC outperforms 81.48% of its industry peers.
YUMC has a debt to FCF ratio of 0.24. This is a very positive value and a sign of high solvency as it would only need 0.24 years to pay back of all of its debts.
YUMC has a Debt to FCF ratio of 0.24. This is amongst the best in the industry. YUMC outperforms 93.33% of its industry peers.
A Debt/Equity ratio of 0.03 indicates that YUMC is not too dependend on debt financing.
YUMC's Debt to Equity ratio of 0.03 is amongst the best of the industry. YUMC outperforms 85.93% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.03 | ||
| Debt/FCF | 0.24 | ||
| Altman-Z | 3.77 |
ROIC/WACC1.33
WACC7.58%
2.3 Liquidity
A Current Ratio of 1.26 indicates that YUMC should not have too much problems paying its short term obligations.
YUMC has a better Current ratio (1.26) than 65.19% of its industry peers.
A Quick Ratio of 1.11 indicates that YUMC should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.11, YUMC is in the better half of the industry, outperforming 62.22% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.26 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
YUMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.31%, which is quite good.
YUMC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.39% yearly.
The Revenue has been growing slightly by 2.79% in the past year.
The Revenue has been growing slightly by 5.19% on average over the past years.
EPS 1Y (TTM)19.31%
EPS 3Y24.41%
EPS 5Y4.39%
EPS Q2Q%11.27%
Revenue 1Y (TTM)2.79%
Revenue growth 3Y4.68%
Revenue growth 5Y5.19%
Sales Q2Q%2.06%
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 18.11% on average per year.
The Revenue is expected to grow by 7.97% on average over the next years.
EPS Next Y10.35%
EPS Next 2Y12.48%
EPS Next 3Y12.52%
EPS Next 5Y18.11%
Revenue Next Year3.48%
Revenue Next 2Y4.84%
Revenue Next 3Y5.33%
Revenue Next 5Y7.97%
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.
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
A Price/Earnings ratio of 19.75 indicates a rather expensive valuation of YUMC.
74.07% of the companies in the same industry are more expensive than YUMC, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.30, YUMC is valued a bit cheaper.
With a Price/Forward Earnings ratio of 16.15, YUMC is valued correctly.
Based on the Price/Forward Earnings ratio, YUMC is valued a bit cheaper than 71.85% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.76. YUMC is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.75 | ||
| Fwd PE | 16.15 |
4.2 Price Multiples
YUMC's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. YUMC is cheaper than 78.52% of the companies in the same industry.
71.85% 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 | 22.9 | ||
| EV/EBITDA | 8.63 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of YUMC may justify a higher PE ratio.
YUMC's earnings are expected to grow with 12.52% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.91
PEG (5Y)4.5
EPS Next 2Y12.48%
EPS Next 3Y12.52%
5. Dividend
5.1 Amount
YUMC has a Yearly Dividend Yield of 2.01%.
Compared to an average industry Dividend Yield of 3.53, YUMC pays a better dividend. On top of this YUMC pays more dividend than 80.74% of the companies listed in the same industry.
YUMC's Dividend Yield is comparable with the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.01% |
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
29.91% of the earnings are spent on dividend by YUMC. This is a low number and sustainable payout ratio.
YUMC's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP29.91%
EPS Next 2Y12.48%
EPS Next 3Y12.52%
47.6
-0.28 (-0.58%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners90.42%
Inst Owner Change0%
Ins Owners0.36%
Ins Owner Change10.22%
Market Cap17.77B
Analysts84
Price Target59.08 (24.12%)
Short Float %1.85%
Short Ratio2.62
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.01% |
Yearly Dividend0.63
Dividend Growth(5Y)5.67%
DP29.91%
Div Incr Years2
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.28%
Min EPS beat(2)-1.21%
Max EPS beat(2)1.77%
EPS beat(4)3
Avg EPS beat(4)6.67%
Min EPS beat(4)-1.21%
Max EPS beat(4)14.29%
EPS beat(8)6
Avg EPS beat(8)9.01%
EPS beat(12)9
Avg EPS beat(12)392.34%
EPS beat(16)9
Avg EPS beat(16)285.11%
Revenue beat(2)0
Avg Revenue beat(2)-6.71%
Min Revenue beat(2)-9.31%
Max Revenue beat(2)-4.1%
Revenue beat(4)0
Avg Revenue beat(4)-5.02%
Min Revenue beat(4)-9.31%
Max Revenue beat(4)-1.38%
Revenue beat(8)1
Avg Revenue beat(8)-4.12%
Revenue beat(12)2
Avg Revenue beat(12)-3.65%
Revenue beat(16)2
Avg Revenue beat(16)-3.28%
PT rev (1m)-0.29%
PT rev (3m)-0.64%
EPS NQ rev (1m)-0.78%
EPS NQ rev (3m)-5.25%
EPS NY rev (1m)-0.35%
EPS NY rev (3m)-2.05%
Revenue NQ rev (1m)0.32%
Revenue NQ rev (3m)-2.1%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)-1.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.75 | ||
| Fwd PE | 16.15 | ||
| P/S | 1.57 | ||
| P/FCF | 22.9 | ||
| P/OCF | 12.44 | ||
| P/B | 3.07 | ||
| P/tB | 4.74 | ||
| EV/EBITDA | 8.63 |
EPS(TTM)2.41
EY5.06%
EPS(NY)2.95
Fwd EY6.19%
FCF(TTM)2.08
FCFY4.37%
OCF(TTM)3.83
OCFY8.04%
SpS30.34
BVpS15.49
TBVpS10.04
PEG (NY)1.91
PEG (5Y)4.5
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.33% | ||
| ROE | 15.84% | ||
| ROCE | 13.97% | ||
| ROIC | 10.08% | ||
| ROICexc | 12.97% | ||
| ROICexgc | 18.34% | ||
| OM | 10.87% | ||
| PM (TTM) | 8.09% | ||
| GM | 41.9% | ||
| FCFM | 6.85% |
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-Score7
Asset Turnover1.03
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.03 | ||
| Debt/FCF | 0.24 | ||
| Debt/EBITDA | 0.1 | ||
| Cap/Depr | 139.53% | ||
| Cap/Sales | 5.77% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 84.11% | ||
| Profit Quality | 84.72% | ||
| Current Ratio | 1.26 | ||
| Quick Ratio | 1.11 | ||
| Altman-Z | 3.77 |
F-Score7
WACC7.58%
ROIC/WACC1.33
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)19.31%
EPS 3Y24.41%
EPS 5Y4.39%
EPS Q2Q%11.27%
EPS Next Y10.35%
EPS Next 2Y12.48%
EPS Next 3Y12.52%
EPS Next 5Y18.11%
Revenue 1Y (TTM)2.79%
Revenue growth 3Y4.68%
Revenue growth 5Y5.19%
Sales Q2Q%2.06%
Revenue Next Year3.48%
Revenue Next 2Y4.84%
Revenue Next 3Y5.33%
Revenue Next 5Y7.97%
EBIT growth 1Y12.94%
EBIT growth 3Y15.62%
EBIT growth 5Y6.49%
EBIT Next Year57.24%
EBIT Next 3Y23.02%
EBIT Next 5Y20.29%
FCF growth 1Y-29.2%
FCF growth 3Y17.33%
FCF growth 5Y-0.98%
OCF growth 1Y-18.3%
OCF growth 3Y7.85%
OCF growth 5Y3.67%