YUM! BRANDS INC (YUM) Stock Fundamental Analysis
NYSE:YUM - New York Stock Exchange, Inc. - US9884981013 - Common Stock - Currency: USD
Taking everything into account, YUM scores 6 out of 10 in our fundamental rating. YUM was compared to 134 industry peers in the Hotels, Restaurants & Leisure industry. YUM scores excellent on profitability, but there are some minor concerns on its financial health. YUM is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year YUM was profitable.
In the past year YUM had a positive cash flow from operations.
Each year in the past 5 years YUM has been profitable.
Each year in the past 5 years YUM had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 21.40%, YUM belongs to the best of the industry, outperforming 97.01% of the companies in the same industry.
With an excellent Return On Invested Capital value of 38.07%, YUM belongs to the best of the industry, outperforming 97.01% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for YUM is significantly above the industry average of 13.97%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 21.4% | ||
| ROE | N/A | ||
| ROIC | 38.07% |
ROA(3y)23.46%
ROA(5y)22.45%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)40.31%
ROIC(5y)38.47%
1.3 Margins
YUM has a better Profit Margin (18.42%) than 92.54% of its industry peers.
YUM's Profit Margin has declined in the last couple of years.
With an excellent Operating Margin value of 32.17%, YUM belongs to the best of the industry, outperforming 97.76% of the companies in the same industry.
In the last couple of years the Operating Margin of YUM has remained more or less at the same level.
Looking at the Gross Margin, with a value of 47.03%, YUM is in line with its industry, outperforming 49.25% of the companies in the same industry.
YUM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 32.17% | ||
| PM (TTM) | 18.42% | ||
| GM | 47.03% |
OM growth 3Y1.43%
OM growth 5Y-0.24%
PM growth 3Y-6.29%
PM growth 5Y-3.17%
GM growth 3Y-0.26%
GM growth 5Y-1.04%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), YUM is creating value.
The number of shares outstanding for YUM has been reduced compared to 1 year ago.
The number of shares outstanding for YUM has been reduced compared to 5 years ago.
YUM has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.52 indicates that YUM is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.52, YUM is doing good in the industry, outperforming 70.15% of the companies in the same industry.
YUM has a debt to FCF ratio of 7.82. This is a slightly negative value and a sign of low solvency as YUM would need 7.82 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 7.82, YUM is doing good in the industry, outperforming 70.90% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 7.82 | ||
| Altman-Z | 2.52 |
ROIC/WACC4.86
WACC7.83%
2.3 Liquidity
A Current Ratio of 1.40 indicates that YUM should not have too much problems paying its short term obligations.
The Current ratio of YUM (1.40) is better than 69.40% of its industry peers.
YUM has a Quick Ratio of 1.40. This is a normal value and indicates that YUM is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of YUM (1.40) is better than 73.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.4 | ||
| Quick Ratio | 1.4 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.03% over the past year.
Measured over the past years, YUM shows a quite strong growth in Earnings Per Share. The EPS has been growing by 9.07% on average per year.
The Revenue has grown by 10.09% in the past year. This is quite good.
The Revenue has been growing slightly by 6.17% on average over the past years.
EPS 1Y (TTM)7.03%
EPS 3Y7.03%
EPS 5Y9.07%
EPS Q2Q%13.04%
Revenue 1Y (TTM)10.09%
Revenue growth 3Y4.66%
Revenue growth 5Y6.17%
Sales Q2Q%11.83%
3.2 Future
YUM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.23% yearly.
YUM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.09% yearly.
EPS Next Y11.18%
EPS Next 2Y11.19%
EPS Next 3Y11.27%
EPS Next 5Y12.23%
Revenue Next Year7.11%
Revenue Next 2Y6.69%
Revenue Next 3Y6.62%
Revenue Next 5Y7.09%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
YUM is valuated rather expensively with a Price/Earnings ratio of 24.70.
Compared to the rest of the industry, the Price/Earnings ratio of YUM indicates a somewhat cheap valuation: YUM is cheaper than 60.45% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.35, YUM is valued at the same level.
Based on the Price/Forward Earnings ratio of 20.53, the valuation of YUM can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of YUM is on the same level as its industry peers.
YUM is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.19, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.7 | ||
| Fwd PE | 20.53 |
4.2 Price Multiples
YUM's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. YUM is more expensive than 66.42% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, YUM is valued a bit cheaper than 66.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.6 | ||
| EV/EBITDA | 18.4 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates YUM does not grow enough to justify the current Price/Earnings ratio.
YUM has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.21
PEG (5Y)2.72
EPS Next 2Y11.19%
EPS Next 3Y11.27%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.97%, YUM has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.59, YUM pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.40, YUM has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.97% |
5.2 History
On average, the dividend of YUM grows each year by 9.75%, which is quite nice.
YUM has been paying a dividend for at least 10 years, so it has a reliable track record.
As YUM did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)9.75%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
53.40% of the earnings are spent on dividend by YUM. This is a bit on the high side, but may be sustainable.
The dividend of YUM is growing, but earnings are growing more, so the dividend growth is sustainable.
DP53.4%
EPS Next 2Y11.19%
EPS Next 3Y11.27%
139.06
+0.7 (+0.51%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners85.29%
Inst Owner Change-1.68%
Ins Owners0.13%
Ins Owner Change-1.99%
Market Cap38.65B
Analysts68.82
Price Target161.64 (16.24%)
Short Float %1.52%
Short Ratio1.92
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.97% |
Yearly Dividend2.69
Dividend Growth(5Y)9.75%
DP53.4%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.1%
Min EPS beat(2)-0.11%
Max EPS beat(2)-0.09%
EPS beat(4)1
Avg EPS beat(4)-0.91%
Min EPS beat(4)-4.11%
Max EPS beat(4)0.66%
EPS beat(8)3
Avg EPS beat(8)0.51%
EPS beat(12)4
Avg EPS beat(12)-0.88%
EPS beat(16)6
Avg EPS beat(16)0.66%
Revenue beat(2)0
Avg Revenue beat(2)-2.39%
Min Revenue beat(2)-4.49%
Max Revenue beat(2)-0.3%
Revenue beat(4)0
Avg Revenue beat(4)-3.2%
Min Revenue beat(4)-4.8%
Max Revenue beat(4)-0.3%
Revenue beat(8)0
Avg Revenue beat(8)-4.19%
Revenue beat(12)2
Avg Revenue beat(12)-2.54%
Revenue beat(16)3
Avg Revenue beat(16)-1.73%
PT rev (1m)-0.05%
PT rev (3m)5.17%
EPS NQ rev (1m)-0.06%
EPS NQ rev (3m)-0.8%
EPS NY rev (1m)0%
EPS NY rev (3m)0.47%
Revenue NQ rev (1m)0.05%
Revenue NQ rev (3m)-0.71%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)-0.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.7 | ||
| Fwd PE | 20.53 | ||
| P/S | 5 | ||
| P/FCF | 26.6 | ||
| P/OCF | 22.32 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.4 |
EPS(TTM)5.63
EY4.05%
EPS(NY)6.77
Fwd EY4.87%
FCF(TTM)5.23
FCFY3.76%
OCF(TTM)6.23
OCFY4.48%
SpS27.84
BVpS-28.08
TBVpS-32.27
PEG (NY)2.21
PEG (5Y)2.72
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 21.4% | ||
| ROE | N/A | ||
| ROCE | 45.85% | ||
| ROIC | 38.07% | ||
| ROICexc | 42.87% | ||
| ROICexgc | 56.51% | ||
| OM | 32.17% | ||
| PM (TTM) | 18.42% | ||
| GM | 47.03% | ||
| FCFM | 18.78% |
ROA(3y)23.46%
ROA(5y)22.45%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)40.31%
ROIC(5y)38.47%
ROICexc(3y)45.11%
ROICexc(5y)43.66%
ROICexgc(3y)59.72%
ROICexgc(5y)58.3%
ROCE(3y)48.55%
ROCE(5y)46.33%
ROICexcg growth 3Y0.45%
ROICexcg growth 5Y-3.03%
ROICexc growth 3Y0.78%
ROICexc growth 5Y-2.83%
OM growth 3Y1.43%
OM growth 5Y-0.24%
PM growth 3Y-6.29%
PM growth 5Y-3.17%
GM growth 3Y-0.26%
GM growth 5Y-1.04%
F-Score6
Asset Turnover1.16
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 7.82 | ||
| Debt/EBITDA | 4.24 | ||
| Cap/Depr | 150.81% | ||
| Cap/Sales | 3.61% | ||
| Interest Coverage | 4.87 | ||
| Cash Conversion | 64.77% | ||
| Profit Quality | 101.97% | ||
| Current Ratio | 1.4 | ||
| Quick Ratio | 1.4 | ||
| Altman-Z | 2.52 |
F-Score6
WACC7.83%
ROIC/WACC4.86
Cap/Depr(3y)174.74%
Cap/Depr(5y)154.81%
Cap/Sales(3y)3.84%
Cap/Sales(5y)3.57%
Profit Quality(3y)88.51%
Profit Quality(5y)97.18%
High Growth Momentum
Growth
EPS 1Y (TTM)7.03%
EPS 3Y7.03%
EPS 5Y9.07%
EPS Q2Q%13.04%
EPS Next Y11.18%
EPS Next 2Y11.19%
EPS Next 3Y11.27%
EPS Next 5Y12.23%
Revenue 1Y (TTM)10.09%
Revenue growth 3Y4.66%
Revenue growth 5Y6.17%
Sales Q2Q%11.83%
Revenue Next Year7.11%
Revenue Next 2Y6.69%
Revenue Next 3Y6.62%
Revenue Next 5Y7.09%
EBIT growth 1Y8.08%
EBIT growth 3Y6.16%
EBIT growth 5Y5.91%
EBIT Next Year12.4%
EBIT Next 3Y9.71%
EBIT Next 5Y9.2%
FCF growth 1Y18.71%
FCF growth 3Y-1%
FCF growth 5Y5.06%
OCF growth 1Y13.72%
OCF growth 3Y-0.33%
OCF growth 5Y5.13%