YUM CHINA HOLDINGS INC (YUMC)
US98850P1093 - Common Stock
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 has an excellent financial health rating, but there are some minor concerns on its profitability. 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.
In the past year YUMC had a positive cash flow from operations.
In the past 5 years YUMC has always been profitable.
In the past 5 years YUMC always reported a positive cash flow from operatings.
1.2 Ratios
YUMC's Return On Assets of 7.57% is amongst the best of the industry. YUMC outperforms 81.34% of its industry peers.
Looking at the Return On Equity, with a value of 14.84%, YUMC is in the better half of the industry, outperforming 75.37% of the companies in the same industry.
YUMC has a Return On Invested Capital of 8.65%. This is in the better half of the industry: YUMC outperforms 70.15% of its industry peers.
The Average Return On Invested Capital over the past 3 years for YUMC is below the industry average of 10.46%.
The last Return On Invested Capital (8.65%) for YUMC is above the 3 year average (6.34%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.57% | ||
| ROE | 14.84% | ||
| ROIC | 8.65% |
ROA(3y)6.03%
ROA(5y)7.11%
ROE(3y)11.25%
ROE(5y)13.91%
ROIC(3y)6.34%
ROIC(5y)7.4%
1.3 Margins
Looking at the Profit Margin, with a value of 7.97%, YUMC is in the better half of the industry, outperforming 70.90% of the companies in the same industry.
YUMC's Profit Margin has declined in the last couple of years.
YUMC has a Operating Margin (10.30%) which is in line with 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 41.60%, YUMC is not doing good in the industry: 61.19% of the companies in the same industry are doing better.
YUMC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.3% | ||
| PM (TTM) | 7.97% | ||
| GM | 41.6% |
OM growth 3Y5.33%
OM growth 5Y0.95%
PM growth 3Y-7.4%
PM growth 5Y-2.19%
GM growth 3Y-0.38%
GM growth 5Y-1.07%
2. Health
2.1 Basic Checks
YUMC has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it 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.
The debt/assets ratio for YUMC is higher compared to a year ago.
2.2 Solvency
YUMC has an Altman-Z score of 3.46. 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 3.46, YUMC belongs to the top of the industry, outperforming 81.34% of the companies in the same industry.
The Debt to FCF ratio of YUMC is 0.56, which is an excellent value as it means it would take YUMC, only 0.56 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.56, YUMC belongs to the top of the industry, outperforming 91.04% of the companies in the same industry.
A Debt/Equity ratio of 0.06 indicates that YUMC is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.06, YUMC belongs to the top of the industry, outperforming 84.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.56 | ||
| Altman-Z | 3.46 |
ROIC/WACC1.15
WACC7.5%
2.3 Liquidity
A Current Ratio of 1.29 indicates that YUMC should not have too much problems paying its short term obligations.
YUMC's Current ratio of 1.29 is fine compared to the rest of the industry. YUMC outperforms 64.18% of its industry peers.
YUMC has a Quick Ratio of 1.15. 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 better Quick ratio (1.15) than 63.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.29 | ||
| Quick Ratio | 1.15 |
3. Growth
3.1 Past
YUMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 21.93%, which is quite impressive.
The Earnings Per Share has been growing slightly by 5.09% on average over the past years.
YUMC shows a small growth in Revenue. In the last year, the Revenue has grown by 5.94%.
Measured over the past years, YUMC shows a small growth in Revenue. The Revenue has been growing by 5.46% on average per year.
EPS 1Y (TTM)21.93%
EPS 3Y9.1%
EPS 5Y5.09%
EPS Q2Q%30.51%
Revenue 1Y (TTM)5.94%
Revenue growth 3Y9.93%
Revenue growth 5Y5.46%
Sales Q2Q%5.39%
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 14.50% yearly.
Based on estimates for the next years, YUMC will show a quite strong growth in Revenue. The Revenue will grow by 10.19% on average per year.
EPS Next Y18.75%
EPS Next 2Y14.68%
EPS Next 3Y14.87%
EPS Next 5Y14.5%
Revenue Next Year5.06%
Revenue Next 2Y6.58%
Revenue Next 3Y7.15%
Revenue Next 5Y10.19%
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 20.69.
Based on the Price/Earnings ratio, YUMC is valued a bit cheaper than the industry average as 73.88% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 28.96. YUMC is valued slightly cheaper when compared to this.
YUMC is valuated rather expensively with a Price/Forward Earnings ratio of 17.93.
Based on the Price/Forward Earnings ratio, YUMC is valued a bit cheaper than 70.15% of the companies in the same industry.
YUMC is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.82, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.69 | ||
| Fwd PE | 17.93 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of YUMC indicates a somewhat cheap valuation: YUMC is cheaper than 74.63% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, YUMC is valued a bit cheaper than the industry average as 67.16% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.35 | ||
| EV/EBITDA | 8.7 |
4.3 Compensation for Growth
YUMC's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
YUMC has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as YUMC's earnings are expected to grow with 14.87% in the coming years.
PEG (NY)1.1
PEG (5Y)4.06
EPS Next 2Y14.68%
EPS Next 3Y14.87%
5. Dividend
5.1 Amount
YUMC has a Yearly Dividend Yield of 1.36%.
Compared to an average industry Dividend Yield of 2.83, YUMC pays a bit more dividend than its industry peers.
Compared to the average S&P500 Dividend Yield of 2.23, YUMC is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.36% |
5.2 History
The dividend of YUMC has a limited annual growth rate of 4.41%.
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)4.41%
Div Incr Years2
Div Non Decr Years4
5.3 Sustainability
YUMC pays out 26.99% 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.
DP26.99%
EPS Next 2Y14.68%
EPS Next 3Y14.87%
YUM CHINA HOLDINGS INC
NYSE:YUMC (11/22/2024, 1:15:51 PM)
47.165
+0.07 (+0.16%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap17.97B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.36% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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EPS beat(16)
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Revenue beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.69 | ||
| Fwd PE | 17.93 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.1
PEG (5Y)4.06
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.57% | ||
| ROE | 14.84% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 10.3% | ||
| PM (TTM) | 7.97% | ||
| GM | 41.6% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.95
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.29 | ||
| Quick Ratio | 1.15 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)21.93%
EPS 3Y9.1%
EPS 5Y
EPS Q2Q%
EPS Next Y18.75%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)5.94%
Revenue growth 3Y9.93%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y