Stock fact sheet · data as of
Yum China Holdings, Inc. (YUMC): fair value, margin of safety and Wheel Score
Consumer Cyclical · Restaurants · China · Defensive
Is YUMC undervalued?
YUMC has a margin of safety of 38%: the stock closed at 43.20 on 16 Oct 2026 against a GLS average fair value of 69.88. 5 of the 9 valuation models that produced a number sit above the price. Our screens treat a discount this large as a strong starting point for a cash-secured put, not as a verdict - the fair value is a model output, and a wide gap can mean the models are missing something the market knows.
The 9 models disagree widely: DDM gives 16.33 while DCF gives 193.56. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.
The nightly engine files YUMC under Defensive: a low beta, a dividend and positive earnings.
Nine valuation models for YUMC
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 193.56 | +348% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 31.15 | -28% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 88.35 | +105% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 33.27 | -23% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 68.42 | +58% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 85.89 | +99% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 80.86 | +87% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 16.33 | -62% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 31.13 | -28% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -6.78 | -116% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 59.00 | +37% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
On financial health YUMC scores 7/9 (Piotroski): most of the nine tests - positive earnings and cash flow, falling debt, rising margins and turnover - are passed, which is the kind of balance sheet a wheel trader is happy to be assigned. The GLS Moat score is 7.2 out of 10: a ten-year record that is consistent in some of the metrics the score tracks (revenue, earnings, margins, cash flow, returns on capital) and patchy in others.
Returns on capital are high - ROIC 12.0%, ROE 17.3%, ROA 8.6% - with debt at 0.44 times equity and a free-cash-flow yield of 6.4%.
The dividend yield is 2.57% at a payout ratio of 39%; for a wheel trader holding assigned shares the dividend adds to the covered-call premium, and the ex-dividend date is worth knowing before a call is sold. Revenue comes mainly from Food And Non Food Revenues From Sales 91%, Other Revenue 8%, Franchise Fees And Income 1% (quarter Q2 FY2026).
Institutional ownership scores 8/10, insider activity 4/10 and Congressional trading 5/10 on the GLS smart-money scales; the last recorded insider buy was on 17 Sep 2026.
| Piotroski F-score | 7 / 9 | ROIC | 12.0% |
|---|---|---|---|
| GLS Moat | 7.2 / 10 | ROE | 17.3% |
| Debt / equity | 0.44 | ROA | 8.6% |
| Free-cash-flow yield | 6.4% | Payout ratio | 39% |
| Institutions | 8 / 10 | Insiders · Congress | 4 · 5 / 10 |
Wheel Score 91: Prime
YUMC scores 91 out of 100 on the Wheel Score, in the Prime band (80 and above), which fewer than one stock in twenty reaches on any night. The score blends five things a wheel trader checks before selling a cash-secured put: the margin of safety (Value, 25/25), Piotroski health (16/20), the GLS moat (11/15), the option premium on offer (20/20) and how easily the stock trades (19/20).
Implied volatility is 41% on the near-the-money contracts 20-60 days out - inside the 35-60% range the Wheel Score pays full marks for: enough premium to be worth selling, not so much that the risk is unpaid. Chain open interest is 21,499 contracts across all expiries - enough for the wheel at normal size.
Volume runs at 1.6M shares a day on a market cap of $14.8B, with a beta of 0.08 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score gives that 19 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 25 / 25 | 38% margin of safety | |
| Health | 16 / 20 | Piotroski 7/9 | |
| Moat | 11 / 15 | moat 7.2/10 | |
| Premium | 20 / 20 | implied volatility 41% | |
| Stability | 19 / 20 | 1.6M shares/day, $14.8B cap, beta 0.08 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
The next earnings report is due on 3 Nov 2026 (before the open), 18 days away; a 30-45-day put sold today would expire after it, which is worth weighing against the premium.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Restaurants
The 12 companies below are the closest to Yum China Holdings, Inc. by market cap within the Restaurants industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| TXRH Texas Roadhouse, Inc. | 166.64 | 124.53 | -34% | 64Fair | $10.9B |
| DPZ Domino's Pizza, Inc. | 303.09 | 307.19 | +1% | 77Good | $10.0B |
| DRI Darden Restaurants, Inc. | 214.31 | 160.14 | -34% | 62Fair | $24.2B |
| QSR Restaurant Brands International Inc. | 72.41 | 69.84 | -4% | 70Good | $25.3B |
| EAT Brinker International, Inc. | 204.91 | 291.64 | +30% | 90Prime | $8.6B |
| BROS Dutch Bros Inc. | 41.10 | 24.65 | -67% | 54Fair | $7.7B |
| CAVA CAVA Group, Inc. | 55.40 | 13.31 | -316% | 56Fair | $6.5B |
| CAKE The Cheesecake Factory Incorporated | 116.59 | 93.42 | -25% | 57Fair | $5.8B |
| CMG Chipotle Mexican Grill, Inc. | 30.56 | 26.14 | -17% | 71Good | $38.7B |
| YUM Yum! Brands, Inc. | 146.69 | 140.99 | -4% | 70Good | $40.0B |
| WING Wingstop Inc. | 122.90 | 137.21 | +10% | 69Good | $3.3B |
| SHAK Shake Shack Inc. | 68.77 | 27.84 | -147% | 54Fair | $2.8B |
⚖ Compare YUMC with 7 of them All Consumer Cyclical stocks →
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A free GLS Equity account gets you nightly fair value and the Wheel Score on ~7,400 US stocks, a watchlist, the scanner preview and the Sunday Scan - the same eight-rule screen, emailed every week. Pro adds the full put and call scanners, unlimited watchlists with alerts and the trade journal.
Start free See the Sunday ScanQuestions about YUMC
Is YUMC undervalued right now?
By the GLS models, yes: at 43.20 the stock is 38% below the average fair value of 69.88 (data as of 16 Oct 2026). Whether the discount is deserved is the question to research next.
What is the Wheel Score of YUMC and what does it mean?
YUMC scores 91 out of 100 (Prime). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for YUMC?
69.88 per share as of 16 Oct 2026 - the simple average of the 9 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Yum China Holdings, Inc. report earnings next?
The next earnings report is due on 3 Nov 2026 (before the open), 18 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does YUMC have listed options, and how liquid are they?
Yes. The nightly snapshot found 318 listed contracts with 21,499 open interest across all expiries and implied volatility of 41% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.