YUM CHINA HOLDINGS INC (YUMC) Stock Fundamental Analysis
USA - NYSE:YUMC - US98850P1093 - Common Stock
43.1 USD
-0.66 (-1.51%)
43.1 USD
0 (0%)
YUMC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 134 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 has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
YUMC had positive earnings in the past year.
YUMC had a positive operating cash flow in the past year.
YUMC had positive earnings in each of the past 5 years.
Each year in the past 5 years YUMC had a positive operating cash flow.
1.2 Ratios
YUMC's Return On Assets of 8.37% is amongst the best of the industry. YUMC outperforms 80.60% of its industry peers.
Looking at the Return On Equity, with a value of 15.87%, YUMC is in the better half of the industry, outperforming 74.63% of the companies in the same industry.
With a decent Return On Invested Capital value of 10.52%, YUMC is doing good in the industry, outperforming 74.63% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for YUMC is significantly below the industry average of 15.67%.
The last Return On Invested Capital (10.52%) for YUMC is above the 3 year average (8.01%), which is a sign of increasing profitability.
| 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
YUMC has a better Profit Margin (8.04%) than 67.91% of its industry peers.
In the last couple of years the Profit Margin of YUMC has remained more or less at the same level.
YUMC's Operating Margin of 11.09% is fine compared to the rest of the industry. YUMC outperforms 61.19% of its industry peers.
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 41.78% is on the low side compared to the rest of the industry. YUMC is outperformed by 61.19% of its industry peers.
In the last couple of years the Gross Margin of YUMC has remained more or less at the same level.
| 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.
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 has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.62 indicates that YUMC is not in any danger for bankruptcy at the moment.
YUMC's Altman-Z score of 3.62 is fine compared to the rest of the industry. YUMC outperforms 79.10% of its industry peers.
YUMC has a debt to FCF ratio of 0.06. This is a very positive value and a sign of high solvency as it would only need 0.06 years to pay back of all of its debts.
The Debt to FCF ratio of YUMC (0.06) is better than 93.28% of its industry peers.
A Debt/Equity ratio of 0.01 indicates that YUMC is not too dependend on debt financing.
YUMC's Debt to Equity ratio of 0.01 is amongst the best of the industry. YUMC outperforms 86.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.06 | ||
| Altman-Z | 3.62 |
ROIC/WACC1.39
WACC7.57%
2.3 Liquidity
A Current Ratio of 1.39 indicates that YUMC should not have too much problems paying its short term obligations.
With a decent Current ratio value of 1.39, YUMC is doing good in the industry, outperforming 68.66% of the companies in the same industry.
A Quick Ratio of 1.22 indicates that YUMC should not have too much problems paying its short term obligations.
YUMC has a better Quick ratio (1.22) than 64.93% 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.
YUMC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.19% yearly.
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
The Earnings Per Share is expected to grow by 17.97% on average over the next years. This is quite good.
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 Y11.26%
EPS Next 2Y12.93%
EPS Next 3Y13.06%
EPS Next 5Y17.97%
Revenue Next Year3.61%
Revenue Next 2Y4.76%
Revenue Next 3Y5.24%
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.
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 17.74.
YUMC's Price/Earnings ratio is a bit cheaper when compared to the industry. YUMC is cheaper than 73.88% of the companies in the same industry.
YUMC's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.41.
With a Price/Forward Earnings ratio of 14.51, YUMC is valued correctly.
Based on the Price/Forward Earnings ratio, YUMC is valued a bit cheaper than the industry average as 73.88% of the companies are valued more expensively.
YUMC's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.87.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.74 | ||
| Fwd PE | 14.51 |
4.2 Price Multiples
YUMC's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. YUMC is cheaper than 85.82% 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 76.12% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.05 | ||
| EV/EBITDA | 7.08 |
4.3 Compensation for Growth
The 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 13.06% in the coming years.
PEG (NY)1.57
PEG (5Y)4.04
EPS Next 2Y12.93%
EPS Next 3Y13.06%
5. Dividend
5.1 Amount
YUMC has a Yearly Dividend Yield of 2.06%. Purely for dividend investing, there may be better candidates out there.
YUMC's Dividend Yield is a higher than the industry average which is at 6.79.
YUMC's Dividend Yield is comparable with the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.06% |
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.
The dividend of YUMC is growing, but earnings are growing more, so the dividend growth is sustainable.
DP32.86%
EPS Next 2Y12.93%
EPS Next 3Y13.06%
43.1
-0.66 (-1.51%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners88.33%
Inst Owner Change-10.16%
Ins Owners0.35%
Ins Owner Change2.19%
Market Cap15.89B
Analysts84
Price Target59.16 (37.26%)
Short Float %2.16%
Short Ratio3.95
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.06% |
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)-0.03%
PT rev (3m)0.13%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.19%
EPS NY rev (1m)0%
EPS NY rev (3m)0.47%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.43%
Revenue NY rev (1m)-0.05%
Revenue NY rev (3m)0.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.74 | ||
| Fwd PE | 14.51 | ||
| P/S | 1.39 | ||
| P/FCF | 19.05 | ||
| P/OCF | 11.04 | ||
| P/B | 2.75 | ||
| P/tB | 4.26 | ||
| EV/EBITDA | 7.08 |
EPS(TTM)2.43
EY5.64%
EPS(NY)2.97
Fwd EY6.89%
FCF(TTM)2.26
FCFY5.25%
OCF(TTM)3.91
OCFY9.06%
SpS31.01
BVpS15.7
TBVpS10.11
PEG (NY)1.57
PEG (5Y)4.04
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%
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-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 | 3.62 |
F-Score8
WACC7.57%
ROIC/WACC1.39
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 Y11.26%
EPS Next 2Y12.93%
EPS Next 3Y13.06%
EPS Next 5Y17.97%
Revenue 1Y (TTM)3.53%
Revenue growth 3Y4.68%
Revenue growth 5Y5.19%
Sales Q2Q%4.03%
Revenue Next Year3.61%
Revenue Next 2Y4.76%
Revenue Next 3Y5.24%
Revenue Next 5Y7.85%
EBIT growth 1Y15.48%
EBIT growth 3Y15.62%
EBIT growth 5Y6.49%
EBIT Next Year57.15%
EBIT Next 3Y22.99%
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%