NYSE:YUMC is not too expensive for the growth it is showing.

Uncover the potential of YUM CHINA HOLDINGS INC (NYSE:YUMC), a growth stock that our stock screener found to be reasonably priced. NYSE:YUMC is excelling in growth aspects, maintaining a healthy financial position, and still offers an attractive valuation. We'll examine each aspect in detail.

Understanding NYSE:YUMC's Growth Score

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NYSE:YUMC has received a 7 out of 10:

• YUMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 90.48%, which is quite impressive.
• The Revenue has grown by 14.72% in the past year. This is quite good.
• The Earnings Per Share is expected to grow by 23.40% on average over the next years. This is a very strong growth
• The Revenue is expected to grow by 11.61% on average over the next years. This is quite good.
• 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.

Valuation Insights: NYSE:YUMC

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NYSE:YUMC has achieved a 5 out of 10:

• Based on the Price/Earnings ratio, YUMC is valued a bit cheaper than 69.85% of the companies in the same industry.
• Compared to an average S&P500 Price/Earnings ratio of 26.28, YUMC is valued a bit cheaper.
• YUMC's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. YUMC is cheaper than 66.91% of the companies in the same industry.
• Based on the Enterprise Value to EBITDA ratio, YUMC is valued a bit cheaper than 78.68% of the companies in the same industry.
• YUMC's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. YUMC is cheaper than 69.12% of the companies in the same industry.
• 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 20.49% in the coming years.

Health Analysis for NYSE:YUMC

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:YUMC, the assigned 7 reflects its health status:

• YUMC has an Altman-Z score of 3.35. 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 3.35, YUMC belongs to the top of the industry, outperforming 82.35% of the companies in the same industry.
• YUMC has a debt to FCF ratio of 0.28. This is a very positive value and a sign of high solvency as it would only need 0.28 years to pay back of all of its debts.
• The Debt to FCF ratio of YUMC (0.28) is better than 94.12% of its industry peers.
• A Debt/Equity ratio of 0.03 indicates that YUMC is not too dependend on debt financing.
• YUMC has a better Debt to Equity ratio (0.03) than 83.09% of its industry peers.
• YUMC has a better Current ratio (1.42) than 64.71% of its industry peers.
• Looking at the Quick ratio, with a value of 1.24, YUMC is in the better half of the industry, outperforming 63.97% of the companies in the same industry.

What does the Profitability looks like for NYSE:YUMC

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:YUMC, the assigned 6 is a significant indicator of profitability:

• The Return On Assets of YUMC (6.87%) is better than 79.41% of its industry peers.
• With a decent Return On Equity value of 12.91%, YUMC is doing good in the industry, outperforming 69.85% of the companies in the same industry.
• YUMC has a better Return On Invested Capital (8.31%) than 69.85% of its industry peers.
• The 3 year average ROIC (6.34%) for YUMC is below the current ROIC(8.31%), indicating increased profibility in the last year.
• With a decent Profit Margin value of 7.53%, YUMC is doing good in the industry, outperforming 69.12% of the companies in the same industry.

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For an up to date full fundamental analysis you can check the fundamental report of YUMC

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.