Zacks Investment Research·3d ago
Here's Why Yum China Holdings (YUMC) is a Strong Value StockWondering how to pick strong, market-beating stocks for your investment portfolio? Look no further than the Zacks Style Scores.
YUMC's operating margin has rebounded from 5.8% in 2024Q4 to 13.0% in 2026Q3, and revenue growth turned to 8.5% in the latest quarter, suggesting the Chinese restaurant franchise is regaining operating momentum.
Price trend, volume and key moving averages
Start with the evidence for owning the stock and the risks that can break the thesis.
Operating margin expanded to 13.0% in 2026Q3 from 5.8% in 2024Q4 as gross margin recovered to 17.4%, although the 2025Q4 trough at 14.5% gross and 5.0% net margin warrants caution about margin durability.
Yum China reported higher sales, revenue, and net income year over year, with a 33% increase in Q4 EPS and a 20% free cash flow increase.
Yum China is the largest restaurant company in China by sales, with $11.8 billion in revenues and 18,101 restaurants as of December 31, 2025.
The company holds exclusive rights to KFC and Pizza Hut in China, along with other brands like Lavazza, Huang Ji Huang, Little Sheep, and Taco Bell.
Trailing total returns as of 11/8/2026, which may include dividends or other distributions. Benchmark is S&P 500 (^GSPC).
Check whether operating performance supports the current valuation.
Recent results and news deserve attention only when they alter the forward view.
| Quarter | EPS (Act vs Est) | Revenue (Act vs Est) |
|---|---|---|
Q4 2026Latest Nov 3, 2026 | $0.91+2.8% vs $0.89 | $3.5B-0.6% vs $3.5B |
Q3 2026 Jul 30, 2026 | $0.70+4.5% vs $0.67 | $3.1B+2.8% vs $3.1B |
Q2 2026 Apr 29, 2026 | $0.87+1.9% vs $0.85 | $3.3B+1.8% vs $3.2B |
Q1 2026 Feb 4, 2026 | $0.40+14.3% vs $0.35 | $2.8B+3.9% vs $2.7B |
Wondering how to pick strong, market-beating stocks for your investment portfolio? Look no further than the Zacks Style Scores.
Yum China (YUMC) is rated Neutral, as growth is driven by aggressive store expansion rather than organic same-store sales momentum. SSSg declined across both KFC and Pizza Hut, with average ticket sizes falling 5–8%, reflecting persistent macro headwinds and cautious Chinese consumer spending. YUMC's total shareholder yield is attractive at 9.2%, combining a 2.4% dividend and a $1.5bn buyback, appealing more to yield investors than growth-focused ones.
I present 10 high-quality dividend growth stocks with strong total return potential, screened for robust fundamentals and attractive valuations as of November 2026. Key criteria include Investment Score ≥70, future return potential ≥12%, consistent 7%+ dividend growth, and payout ratios below 100%. Top picks such as RMD, NTES, and NVDA offer compelling upside, with future return estimates driven by EPS growth, yield, and potential valuation mean reversion.
Yum China NYSE: YUMC reported third-quarter 2026 revenue growth of 8% in reporting currency, while operating profit rose 13% and diluted earnings per share increased 20%, CEO Joey Wat said during the company's earnings call. Excluding foreign-exchange effects, system sales grew 3%, core operating profit increased 6%, and the company recorded its 10th consecutive quarter of growth in system sales, operating profit and operating-profit margin.
Benchmark YUMC against direct peers instead of judging its metrics in isolation.
Key metrics vs top competitors for Yum China Holdings, Inc. (YUMC)
| Company | Price | Market Cap | P/E Ratio | Rev Growth (1Y) | Net Margin | ROE | Div Yield |
|---|---|---|---|---|---|---|---|
| $49.95 | $17.44B | 17.06 | 4.37% | 7.9% | 16.48% | 1.97% | |
| $276.52 | $196.47B | 21.77 | 3.72% | 32.38% | — | 2.58% | |
| $77.69 | $26.96B | 23.67 | 12.23% | 15.35% | 28.07% | 3.12% | |
| $161.14 | $44.41B | 12.82 | 8.81% | 39.14% | — | 1.76% | |
| $8.15 | $1.55B | 16.13 | -3.1% | 4.4% | 81.11% | 8.19% | |
| $14.09 | $268.75M | 8.13 | -6.75% | 2.84% | — | 6.16% |
Yum China Holdings, Inc. (YUMC) vs competitors — business, growth, and fundamentals comparison against the closest industry rivals.
Verify the primary filings, follow material updates, and answer the remaining questions.
Yum China Holdings, Inc. (YUMC) SEC filings — annual & quarterly reports (10-K, 10-Q)
Nov 3, 2026·SEC
Aug 7, 2026·SEC
Aug 6, 2026·SEC
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Yum China Holdings, Inc. (YUMC) stock FAQ — growth, dividends, profitability & financials explained
Yum China Holdings, Inc. (YUMC) reported $12.71B in revenue over the trailing twelve months. Revenue was $11.80B in fiscal year 2025. That is 70% more than the $6.93B of fiscal year 2014.
Yum China Holdings, Inc. (YUMC) grew revenue by 9.9% over the trailing twelve months, compared with the twelve months before.
Yes. Yum China Holdings, Inc. (YUMC) earned $1.00B in net income over the trailing twelve months (a 7.9% net margin).
Yes. Yum China Holdings, Inc. (YUMC) pays a dividend that yields 1.97% at the current price, a moderate yield.
Yum China Holdings, Inc. (YUMC) had a return on equity (ROE) of 16.5% over the trailing twelve months. That is above the market's typical 10-15%.
Yum China Holdings, Inc. (YUMC) generated $953.9M in free cash flow over the trailing twelve months.
