YUM CHINA HOLDINGS INC (YUMC) Stock Fundamental Analysis
NYSE:YUMC - New York Stock Exchange, Inc. - US98850P1093 - Common Stock - Currency: USD
Taking everything into account, YUMC scores 6 out of 10 in our fundamental rating. YUMC was compared to 136 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 decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year YUMC was profitable.
YUMC had a positive operating cash flow in the past year.
YUMC had positive earnings in each of the past 5 years.
In the past 5 years YUMC always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 8.19%, YUMC is in the better half of the industry, outperforming 78.68% of the companies in the same industry.
YUMC's Return On Equity of 15.90% is fine compared to the rest of the industry. YUMC outperforms 75.74% of its industry peers.
YUMC has a better Return On Invested Capital (9.81%) than 72.79% of its industry peers.
The Average Return On Invested Capital over the past 3 years for YUMC is significantly below the industry average of 14.17%.
The last Return On Invested Capital (9.81%) for YUMC is above the 3 year average (8.01%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.19% | ||
| ROE | 15.9% | ||
| ROIC | 9.81% |
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
With a decent Profit Margin value of 8.06%, YUMC is doing good in the industry, outperforming 66.18% of the companies in the same industry.
YUMC's Profit Margin has been stable in the last couple of years.
With a Operating Margin value of 10.63%, YUMC perfoms like the industry average, outperforming 56.62% of the companies in the same industry.
YUMC's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 41.80%, YUMC is doing worse than 60.29% of the companies in the same industry.
YUMC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.63% | ||
| PM (TTM) | 8.06% | ||
| GM | 41.8% |
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.
YUMC has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, YUMC has more shares outstanding
YUMC has a better debt/assets ratio than last year.
2.2 Solvency
YUMC has an Altman-Z score of 3.49. This indicates that YUMC is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of YUMC (3.49) is better than 81.62% of its industry peers.
YUMC has a debt to FCF ratio of 0.25. This is a very positive value and a sign of high solvency as it would only need 0.25 years to pay back of all of its debts.
YUMC has a Debt to FCF ratio of 0.25. This is amongst the best in the industry. YUMC outperforms 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 Debt to Equity ratio of 0.03. This is amongst the best in the industry. YUMC outperforms 88.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.03 | ||
| Debt/FCF | 0.25 | ||
| Altman-Z | 3.49 |
ROIC/WACC1.31
WACC7.47%
2.3 Liquidity
YUMC has a Current Ratio of 1.18. This is a normal value and indicates that YUMC is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Current ratio value of 1.18, YUMC is doing good in the industry, outperforming 64.71% of the companies in the same industry.
YUMC has a Quick Ratio of 1.00. This is a normal value and indicates that YUMC is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.00, YUMC is in the better half of the industry, outperforming 62.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.18 | ||
| Quick Ratio | 1 |
3. Growth
3.1 Past
YUMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 18.32%, 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.
The Revenue has been growing slightly by 2.96% in the past year.
The Revenue has been growing slightly by 5.19% on average over the past years.
EPS 1Y (TTM)18.32%
EPS 3Y24.41%
EPS 5Y4.39%
EPS Q2Q%8.45%
Revenue 1Y (TTM)2.96%
Revenue growth 3Y4.68%
Revenue growth 5Y5.19%
Sales Q2Q%0.78%
3.2 Future
The Earnings Per Share is expected to grow by 18.64% on average over the next years. This is quite good.
The Revenue is expected to grow by 8.51% on average over the next years. This is quite good.
EPS Next Y12.37%
EPS Next 2Y13.03%
EPS Next 3Y13.19%
EPS Next 5Y18.64%
Revenue Next Year4.99%
Revenue Next 2Y5.9%
Revenue Next 3Y6.4%
Revenue Next 5Y8.51%
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
Based on the Price/Earnings ratio of 18.13, the valuation of YUMC can be described as rather expensive.
70.59% of the companies in the same industry are more expensive than YUMC, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of YUMC to the average of the S&P500 Index (27.75), we can say YUMC is valued slightly cheaper.
A Price/Forward Earnings ratio of 14.56 indicates a correct valuation of YUMC.
76.47% of the companies in the same industry are more expensive than YUMC, based on the Price/Forward Earnings ratio.
YUMC's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 20.49.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.13 | ||
| Fwd PE | 14.56 |
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 75.00% 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 66.18% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.76 | ||
| EV/EBITDA | 7.95 |
4.3 Compensation for Growth
The 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.
YUMC's earnings are expected to grow with 13.19% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.47
PEG (5Y)4.13
EPS Next 2Y13.03%
EPS Next 3Y13.19%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.22%, YUMC has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.85, YUMC pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.44, YUMC has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
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
27.22% of the earnings are spent on dividend by YUMC. This is a low number and sustainable payout ratio.
The dividend of YUMC is growing, but earnings are growing more, so the dividend growth is sustainable.
DP27.22%
EPS Next 2Y13.03%
EPS Next 3Y13.19%
43.33
+0.02 (+0.05%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners86.58%
Inst Owner Change3.43%
Ins Owners0.37%
Ins Owner Change8.94%
Market Cap16.25B
Analysts83.75
Price Target60.45 (39.51%)
Short Float %2.65%
Short Ratio2.82
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
Yearly Dividend0.63
Dividend Growth(5Y)5.67%
DP27.22%
Div Incr Years2
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.8%
Min EPS beat(2)1.77%
Max EPS beat(2)11.84%
EPS beat(4)4
Avg EPS beat(4)8.75%
Min EPS beat(4)1.77%
Max EPS beat(4)14.29%
EPS beat(8)7
Avg EPS beat(8)15.03%
EPS beat(12)9
Avg EPS beat(12)390.36%
EPS beat(16)10
Avg EPS beat(16)286.14%
Revenue beat(2)0
Avg Revenue beat(2)-5.35%
Min Revenue beat(2)-9.31%
Max Revenue beat(2)-1.38%
Revenue beat(4)0
Avg Revenue beat(4)-5.21%
Min Revenue beat(4)-9.31%
Max Revenue beat(4)-1.38%
Revenue beat(8)2
Avg Revenue beat(8)-3.2%
Revenue beat(12)2
Avg Revenue beat(12)-3.34%
Revenue beat(16)3
Avg Revenue beat(16)-2.52%
PT rev (1m)1.89%
PT rev (3m)5.55%
EPS NQ rev (1m)-1.85%
EPS NQ rev (3m)-4.33%
EPS NY rev (1m)-0.27%
EPS NY rev (3m)-0.86%
Revenue NQ rev (1m)-1.56%
Revenue NQ rev (3m)-2.59%
Revenue NY rev (1m)-0.11%
Revenue NY rev (3m)-2.64%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.13 | ||
| Fwd PE | 14.56 | ||
| P/S | 1.44 | ||
| P/FCF | 22.76 | ||
| P/OCF | 11.45 | ||
| P/B | 2.84 | ||
| P/tB | 4.39 | ||
| EV/EBITDA | 7.95 |
EPS(TTM)2.39
EY5.52%
EPS(NY)2.98
Fwd EY6.87%
FCF(TTM)1.9
FCFY4.39%
OCF(TTM)3.78
OCFY8.73%
SpS30.14
BVpS15.27
TBVpS9.88
PEG (NY)1.47
PEG (5Y)4.13
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.19% | ||
| ROE | 15.9% | ||
| ROCE | 13.59% | ||
| ROIC | 9.81% | ||
| ROICexc | 12.35% | ||
| ROICexgc | 17.25% | ||
| OM | 10.63% | ||
| PM (TTM) | 8.06% | ||
| GM | 41.8% | ||
| FCFM | 6.32% |
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-Score6
Asset Turnover1.02
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.03 | ||
| Debt/FCF | 0.25 | ||
| Debt/EBITDA | 0.1 | ||
| Cap/Depr | 148.11% | ||
| Cap/Sales | 6.24% | ||
| Interest Coverage | 300.25 | ||
| Cash Conversion | 84.62% | ||
| Profit Quality | 78.38% | ||
| Current Ratio | 1.18 | ||
| Quick Ratio | 1 | ||
| Altman-Z | 3.49 |
F-Score6
WACC7.47%
ROIC/WACC1.31
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)18.32%
EPS 3Y24.41%
EPS 5Y4.39%
EPS Q2Q%8.45%
EPS Next Y12.37%
EPS Next 2Y13.03%
EPS Next 3Y13.19%
EPS Next 5Y18.64%
Revenue 1Y (TTM)2.96%
Revenue growth 3Y4.68%
Revenue growth 5Y5.19%
Sales Q2Q%0.78%
Revenue Next Year4.99%
Revenue Next 2Y5.9%
Revenue Next 3Y6.4%
Revenue Next 5Y8.51%
EBIT growth 1Y5.81%
EBIT growth 3Y15.62%
EBIT growth 5Y6.49%
EBIT Next Year58.08%
EBIT Next 3Y24.71%
EBIT Next 5Y20.52%
FCF growth 1Y-6.42%
FCF growth 3Y17.33%
FCF growth 5Y-0.98%
OCF growth 1Y-3.67%
OCF growth 3Y7.85%
OCF growth 5Y3.67%