McDonald's vs Yum China
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KIRA’s take AI analyst
I put McDonald's and Yum China side by side, using each one’s latest annual report. Here is what stands out:
- McDonald's is the larger business, with $26.9B of revenue in fiscal 2025 against $11.8B for Yum China, about 2.3 times as much.
- Yum China grew revenue faster (4.4%, against 3.7%).
- McDonald's kept more of each dollar of sales as operating profit (46.1% operating margin, against 10.9%).
- McDonald's turned more of its sales into free cash flow (26.7% FCF margin, against 7.1%).
- Investors pay more for each dollar of McDonald's’s earnings: a P/E of 20.4x against 16.7x for Yum China.
Who comes out ahead
Of the 6 measures where higher (or lower) is clearly better, how many each company leads.
McDonald's
MCD
3/6
Operating marginNet marginFCF margin
Yum China
YUMC
3/6
Revenue growth5-year growthShare count change
Side by side
Best in the row
| Latest fiscal year | MCD FY25 | YUMC FY25 |
|---|---|---|
| Size | ||
| Market cap | $178.4B | $15.9B |
| Revenue | $26.9B | $11.8B |
| Free cash flow | $7.2B | $840M |
| Net income | $8.6B | $929M |
| Growth | ||
| Revenue growth | 3.7% | 4.4% |
| 5-year growth | 7.0% | 7.4% |
| Share count change | −0.8% | −4.9% |
| Profitability | ||
| Gross margin | — | — |
| Operating margin | 46.1% | 10.9% |
| Net margin | 31.9% | 7.9% |
| FCF margin | 26.7% | 7.1% |
| Return on capital | 25.4% | — |
| Return on equity | — | 16.7% |
| Balance sheet | ||
| Net debt | $42.3B | — |
| Net debt / EBITDA | 3.3x | — |
| Dividends and buybacks | $7.2B | $1.5B |
| Valuation & quality | ||
| P/E | 20.4x | 16.7x |
| Piotroski F-score | 6 | — |
Ten years
Revenue
Operating margin
Free cash flow
Return on capital
Each company's latest fiscal year; fiscal years end in different months. The best value in each row is highlighted where higher (or lower) is clearly better. Not investment advice.