ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Yum China Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2026 was 13.73%.
As of today (2026-07-04), Yum China Holdings's WACC % is 4.00%. Yum China Holdings's ROIC % is 10.76% (calculated using TTM income statement data).
Yum China Holdings generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Yum China Holdings (HAM:0YU) ROIC % Explanation
ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROIC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Yum China Holdings's WACC % is 4.00%. Yum China Holdings's ROIC % is 10.76% (calculated using TTM income statement data).
Yum China Holdings generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Yum China Holdings ROIC % Related Terms
Yum China Holdings ROIC % Historical Data
* Premium members only.
The historical data trend for Yum China Holdings's ROIC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Restaurants subindustry, Yum China Holdings's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Yum China Holdings ROIC % vs Restaurants Industry
For the Restaurants industry and Consumer Cyclical sector, Yum China Holdings's ROIC % distribution charts can be found below:
* The bar in red indicates where Yum China Holdings's ROIC % falls into.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Yum China Holdings (HAM:0YU) has a ROIC % of 13.73% as of Mar. 2026. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Yum China Holdings and its competitors.
Is Yum China Holdings' ROIC % too high?
Yum China Holdings' current ROIC % is 13.73%. The Restaurants industry median ROIC % is 4.26. Yum China Holdings' value of 13.73% is 222.3% above this industry median. Overall, Yum China Holdings has a GF Score™ of 81/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Yum China Holdings' ROIC % compare to TXRH and DPZ?
Yum China Holdings' ROIC % of 13.73% can be compared against companies in the Restaurants industry. The industry median ROIC % is 4.26. Yum China Holdings' value of 13.73% is 222.3% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROIC % for a Restaurants company?
The median ROIC % among Restaurants companies is 4.26, based on 357 companies in the industry. Companies in the top quartile (top 25%) have a ROIC % significantly above this median, while those in the bottom quartile fall well below. However, ROIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Yum China Holdings's current ROIC % of 13.73% is 222.3% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROIC % mean?
A high ROIC % can signal that a stock is expensive relative to its fundamentals. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Yum China Holdings and its competitors. For the Restaurants industry, the median ROIC % is 4.26 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Yum China Holdings's current ROIC % is 13.73%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Yum China Holdings stock overvalued right now?
Based on GuruFocus' analysis, Yum China Holdings (HAM:0YU) is currently considered Modestly Undervalued. The stock's GF Value™ is €47.93, compared to a current price of €37.00 — trading 22.8% below its estimated fair value. The current ROIC % is 13.73% and 222.3% above the Restaurants industry median of 4.26. Yum China Holdings' overall GF Score™ is 81/100. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROIC % calculated?
ROIC % is calculated from a company's financial statements. For Yum China Holdings (HAM:0YU), the current ROIC % is 13.73% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Yum China Holdings (HAM:0YU) Overvalued in 2026?
Based on GuruFocus' analysis, Yum China Holdings stock appears to be undervalued.
The current stock price of €37.00 is trading 22.8% below its estimated GF Value™ of €47.93.
GuruFocus considers Yum China Holdings to be Modestly Undervalued.
Key valuation signals for HAM:0YU:
ROIC %: 13.73%
GF Value™: €47.93 vs. price of €37.00 (22.8% below fair value)
Industry Position: 222.3% above the Restaurants median
No single metric tells the full story. See the HAM:0YU stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Yum China is the largest restaurant operator in China, with over 18,000 locations and USD 12 billion in systemwide sales as of 2025. It generates revenue primarily from its own restaurants and franchise fees. While KFC and Pizza Hut are its flagship brands, Yum China's portfolio also includes Little Sheep, Taco Bell, Huang Ji Huang, and Lavazza.As a trademark licensee of Yum Brands, Yum China pays 3% of KFC and Pizza Hut's systemwide sales to its former parent, from which it spun off in 2016. However, even before the separation, Yum China was granted substantial autonomy, giving its Chinese leadership decision-making authority over menu, supply chain, and marketing—an unusual practice for Western chains at the time.
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