YUM CHINA HOLDINGS INC (YUMC) Stock Fundamental Analysis
NYSE:YUMC - US98850P1093 - Common Stock
44.72 USD
+0.14 (+0.31%)
44.72 USD
0 (0%)
YUMC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 131 industry peers in the Hotels, Restaurants & Leisure industry. While YUMC has a great health rating, its profitability is only average at the moment. YUMC has a decent growth rate and is not valued too expensively.
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 has a better Return On Assets (8.37%) than 81.68% of its industry peers.
YUMC's Return On Equity of 15.87% is fine compared to the rest of the industry. YUMC outperforms 74.81% of its industry peers.
The Return On Invested Capital of YUMC (10.52%) is better than 74.81% of its industry peers.
The Average Return On Invested Capital over the past 3 years for YUMC is significantly below the industry average of 15.87%.
The 3 year average ROIC (8.01%) for YUMC is below the current ROIC(10.52%), indicating increased profibility in the last year.
| 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
Looking at the Profit Margin, with a value of 8.04%, YUMC is in the better half of the industry, outperforming 67.94% of the companies in the same industry.
YUMC's Profit Margin has been stable in the last couple of years.
YUMC has a better Operating Margin (11.09%) than 61.07% of its industry peers.
YUMC's Operating Margin has been stable in the last couple of years.
The Gross Margin of YUMC (41.78%) is worse than 60.31% of its industry peers.
YUMC's Gross Margin has been stable in the last couple of years.
| 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
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
Compared to 5 years ago, YUMC has more shares outstanding
Compared to 1 year ago, YUMC has an improved debt to assets ratio.
2.2 Solvency
YUMC has an Altman-Z score of 3.68. This indicates that YUMC is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 3.68, YUMC is doing good in the industry, outperforming 78.63% of the companies in the same industry.
The Debt to FCF ratio of YUMC is 0.06, which is an excellent value as it means it would take YUMC, only 0.06 years of fcf income to pay off all of its debts.
YUMC's Debt to FCF ratio of 0.06 is amongst the best of the industry. YUMC outperforms 93.89% of its industry peers.
A Debt/Equity ratio of 0.01 indicates that YUMC is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.01, YUMC belongs to the top of the industry, outperforming 87.02% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.06 | ||
| Altman-Z | 3.68 |
ROIC/WACC1.37
WACC7.69%
2.3 Liquidity
A Current Ratio of 1.39 indicates that YUMC should not have too much problems paying its short term obligations.
The Current ratio of YUMC (1.39) is better than 68.70% of its industry peers.
A Quick Ratio of 1.22 indicates that YUMC should not have too much problems paying its short term obligations.
YUMC's Quick ratio of 1.22 is fine compared to the rest of the industry. YUMC outperforms 65.65% 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.
Measured over the past 5 years, YUMC shows a small growth in Earnings Per Share. The EPS has been growing by 4.39% on average per year.
Looking at the last year, YUMC shows a small growth in Revenue. The Revenue has grown by 3.53% in the last year.
Measured over the past years, YUMC shows a small growth in Revenue. The Revenue has been growing by 5.19% on average per year.
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
Based on estimates for the next years, YUMC will show a quite strong growth in Earnings Per Share. The EPS will grow by 17.97% on average per year.
The Revenue is expected to grow by 7.85% on average over the next years.
EPS Next Y11.26%
EPS Next 2Y12.93%
EPS Next 3Y13.06%
EPS Next 5Y17.97%
Revenue Next Year3.66%
Revenue Next 2Y4.76%
Revenue Next 3Y5.25%
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
A Price/Earnings ratio of 18.40 indicates a rather expensive valuation of YUMC.
YUMC's Price/Earnings ratio is a bit cheaper when compared to the industry. YUMC is cheaper than 74.05% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.17, YUMC is valued a bit cheaper.
With a Price/Forward Earnings ratio of 15.05, YUMC is valued correctly.
Based on the Price/Forward Earnings ratio, YUMC is valued a bit cheaper than 74.05% of the companies in the same industry.
YUMC is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.78, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.4 | ||
| Fwd PE | 15.05 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, YUMC is valued cheaply inside the industry as 87.02% of the companies are valued more expensively.
76.34% 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 | 19.77 | ||
| EV/EBITDA | 7.39 |
4.3 Compensation for Growth
YUMC's 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.
YUMC's earnings are expected to grow with 13.06% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.63
PEG (5Y)4.2
EPS Next 2Y12.93%
EPS Next 3Y13.06%
5. Dividend
5.1 Amount
YUMC has a Yearly Dividend Yield of 2.06%.
Compared to an average industry Dividend Yield of 4.19, YUMC pays a better dividend. On top of this YUMC pays more dividend than 80.15% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, YUMC has a dividend comparable with the average S&P500 company.
| 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.
YUMC's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP32.86%
EPS Next 2Y12.93%
EPS Next 3Y13.06%
44.72
+0.14 (+0.31%)
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 Change1.93%
Market Cap16.49B
Analysts84
Price Target59.19 (32.36%)
Short Float %1.7%
Short Ratio3.25
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)-0.05%
EPS NQ rev (1m)0.37%
EPS NQ rev (3m)-1.77%
EPS NY rev (1m)0.82%
EPS NY rev (3m)0.47%
Revenue NQ rev (1m)0.22%
Revenue NQ rev (3m)-1.63%
Revenue NY rev (1m)0.18%
Revenue NY rev (3m)0.19%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.4 | ||
| Fwd PE | 15.05 | ||
| P/S | 1.44 | ||
| P/FCF | 19.77 | ||
| P/OCF | 11.45 | ||
| P/B | 2.85 | ||
| P/tB | 4.42 | ||
| EV/EBITDA | 7.39 |
EPS(TTM)2.43
EY5.43%
EPS(NY)2.97
Fwd EY6.64%
FCF(TTM)2.26
FCFY5.06%
OCF(TTM)3.91
OCFY8.73%
SpS31.01
BVpS15.7
TBVpS10.11
PEG (NY)1.63
PEG (5Y)4.2
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 | 3.68 |
F-Score8
WACC7.69%
ROIC/WACC1.37
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 Year3.66%
Revenue Next 2Y4.76%
Revenue Next 3Y5.25%
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%