11 Best Fast Food Stocks To Invest In Right Now

6. Yum China Holdings, Inc. (NYSE:YUMC)

Number of Hedge Fund Holders: 24

Yum China Holdings, Inc. (NYSE:YUMC) is a Fortune 500 restaurant company, headquartered in Shanghai, China, which operates and manages several well-known brands, such as KFC, Pizza Hut, and Taco Bell.

The company posted strong results in Q2 2024, setting numerous records, including a quarterly revenue of $2.68 billion, operating profit of $266 million, and diluted EPS of 55 cents. Total transactions grew 13%, with same-store transactions expanding 4%, driven by healthy traffic. Yum China Holdings, Inc. (NYSE:YUMC) attributed the success this quarter to its ability to attract new and existing customers through a broadened price range that offers quality offerings at affordable rates. The company also ended the quarter in solid liquidity, with $3.1 billion in net cash.

In May, Yum China Holdings, Inc. (NYSE:YUMC) launched the first Pizza Hut WOW store in Guangzhou, a cheaper version of the chain, with the menu priced significantly less than traditional Pizza Hut restaurants in the country. The concept behind this is to cater to price-conscious diners in China, as the economy struggles. The company has converted around 100 Pizza Hut restaurants into WOW stores and intends to achieve 200 outlets by the end of the year.

This was the most profitable quarter for Pizza Hut, because of the success of WOW stores and the company’s efforts in enhancing operational efficiency which it achieved by simplifying menu and kitchen operations, which reduced production preparation time. Yum China Holdings, Inc. (NYSE:YUMC) has also added innovative offerings to its menu, like the Pizzaburger, which proved a great success and outsold the Hawaiian Pizza, one of their synergies.

Another business segment that contributed to growth during the quarter was K-Coffee, a coffee brand operating adjacent to KFC restaurants in China. Its sales have exceeded RMB 1 billion (approximately $140 million) during the first half of the year, registering a 26% increase from 2023. The company has sold over 120 million cups between January and June, up 36% year-over-year. Yum China Holdings, Inc. (NYSE:YUMC) had rolled out around 200 K-Coffee stores until the end of June, with plans to open between 500-600 by the end of the year.

Yum China Holdings, Inc. is one of the best fast food stocks to invest in right now. Wall Street analysts have a consensus Strong Buy rating on the stock, with a median share price upside potential of 14%.