McDonald's Corp (MCD) is overvalued and Yum China Holdings Inc (YUMC) is undervalued.
Against our estimates of intrinsic value, YUMC trades at the wider discount: a margin of safety of +23%, against -21% for MCD.
Values as of the 22 Sept 2026 close.
Discounting its cash flows at 7.5% (average of 3 methods) values the shares at $206.94; the price of $250.35 is 21% above that value, and 81% of that value comes from beyond year five.
Leak Score 60/100 on 8 of 12 signals
Discounting its cash flows at 8.7% (average of 3 methods) values the shares at $54.25; the price of $41.58 is 23% below that value, and 77% of that value comes from beyond year five.
Leak Score 100/100 on 3 of 12 signals
| Metric | MCD | YUMC |
|---|---|---|
| Verdict | Overvalued | Undervalued |
| Price | $250.35 | $41.58 |
| Intrinsic value | $206.94 | $54.25 |
| Margin of safety | -21% | +23% |
| Leak Score | 60/100 (8/12) | 100/100 (3/12) |
| Market cap | $177.2B | $14.2B |
| Revenue growth, 5 years | 7.0% | 7.4% |
| Operating margin | 45.7% | 12.5% |
| Net margin | 31.7% | 7.8% |
| Return on equity | — | 17.5% |
| Debt to equity | — | 0.43 |
| P/E | 20.3x | 15.3x |
| Forward P/E | 18.0x | 12.4x |
| P/B | — | 2.7x |
| Dividend yield | 3.0% | 2.7% |