NYSE:YUMC stands out as a growth opportunity that won't break the bank.

Our stock screener has spotted YUM CHINA HOLDINGS INC (NYSE:YUMC) as a growth stock which is not overvalued. NYSE:YUMC is scoring great on several growth aspects while it also shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

Evaluating Growth: NYSE:YUMC

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NYSE:YUMC was assigned a score of 7 for growth:

• 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.
• YUMC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.72%.
• The Earnings Per Share is expected to grow by 23.40% on average over the next years. This is a very strong growth
• Based on estimates for the next years, YUMC will show a quite strong growth in Revenue. The Revenue will grow by 11.45% on average per year.
• 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.

ChartMill's Evaluation of Valuation

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NYSE:YUMC scores a 5 out of 10:

• Compared to the rest of the industry, the Price/Earnings ratio of YUMC indicates a somewhat cheap valuation: YUMC is cheaper than 70.15% of the companies listed in the same industry.
• The average S&P500 Price/Earnings ratio is at 25.25. YUMC is valued slightly cheaper when compared to this.
• YUMC's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. YUMC is cheaper than 68.66% of the companies in the same industry.
• YUMC's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.67.
• 81.34% of the companies in the same industry are more expensive than YUMC, based on the Enterprise Value to EBITDA ratio.
• Compared to the rest of the industry, the Price/Free Cash Flow ratio of YUMC indicates a somewhat cheap valuation: YUMC is cheaper than 67.91% of the companies listed in the same industry.
• YUMC has a very decent profitability rating, which may justify a higher PE ratio.
• YUMC's earnings are expected to grow with 13.21% in the coming years. This may justify a more expensive valuation.

Looking at the Health

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NYSE:YUMC has earned a 7 out of 10:

• YUMC has an Altman-Z score of 3.22. This indicates that YUMC is financially healthy and has little risk of bankruptcy at the moment.
• YUMC has a better Altman-Z score (3.22) than 83.58% of its industry peers.
• 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 94.03% of its industry peers.
• YUMC has a Debt/Equity ratio of 0.03. This is a healthy value indicating a solid balance between debt and equity.
• YUMC has a better Debt to Equity ratio (0.03) than 86.57% of its industry peers.
• YUMC has a Current ratio of 1.42. This is in the better half of the industry: YUMC outperforms 70.15% of its industry peers.
• The Quick ratio of YUMC (1.24) is better than 64.93% of its industry peers.

Looking at the Profitability

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:YUMC has earned a 6 out of 10:

• Looking at the Return On Assets, with a value of 6.87%, YUMC is in the better half of the industry, outperforming 77.61% of the companies in the same industry.
• YUMC has a better Return On Equity (12.91%) than 67.91% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 8.31%, YUMC is in the better half of the industry, outperforming 66.42% of the companies in the same industry.
• The 3 year average ROIC (6.34%) for YUMC is below the current ROIC(8.31%), indicating increased profibility in the last year.
• The Profit Margin of YUMC (7.53%) is better than 65.67% of its industry peers.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

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

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.