YUM! BRANDS INC (YUM) Stock Fundamental Analysis
NYSE:YUM - New York Stock Exchange, Inc. - US9884981013 - Common Stock - Currency: USD
YUM gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 134 industry peers in the Hotels, Restaurants & Leisure industry. While YUM belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. While showing a medium growth rate, YUM is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
YUM had positive earnings in the past year.
In the past year YUM had a positive cash flow from operations.
In the past 5 years YUM has always been profitable.
In the past 5 years YUM always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 22.09%, YUM belongs to the top of the industry, outperforming 97.01% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 37.25%, YUM belongs to the top of the industry, outperforming 97.01% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for YUM is significantly above the industry average of 13.88%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 22.09% | ||
| ROE | N/A | ||
| ROIC | 37.25% |
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
The Profit Margin of YUM (19.68%) is better than 94.03% of its industry peers.
YUM's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 32.44%, YUM belongs to the top of the industry, outperforming 97.76% of the companies in the same industry.
YUM's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 47.71%, YUM is in line with its industry, outperforming 52.24% of the companies in the same industry.
In the last couple of years the Gross Margin of YUM has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 32.44% | ||
| PM (TTM) | 19.68% | ||
| GM | 47.71% |
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
YUM has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, YUM has less shares outstanding
YUM has less shares outstanding than it did 5 years ago.
YUM has a better debt/assets ratio than last year.
2.2 Solvency
YUM has an Altman-Z score of 2.58. This is not the best score and indicates that YUM is in the grey zone with still only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.58, YUM is doing good in the industry, outperforming 72.39% of the companies in the same industry.
The Debt to FCF ratio of YUM is 7.91, which is on the high side as it means it would take YUM, 7.91 years of fcf income to pay off all of its debts.
YUM's Debt to FCF ratio of 7.91 is fine compared to the rest of the industry. YUM outperforms 67.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 7.91 | ||
| Altman-Z | 2.58 |
ROIC/WACC4.33
WACC8.6%
2.3 Liquidity
A Current Ratio of 1.47 indicates that YUM should not have too much problems paying its short term obligations.
The Current ratio of YUM (1.47) is better than 73.13% of its industry peers.
YUM has a Quick Ratio of 1.47. This is a normal value and indicates that YUM is financially healthy and should not expect problems in meeting its short term obligations.
YUM has a Quick ratio of 1.47. This is in the better half of the industry: YUM outperforms 75.37% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.47 | ||
| Quick Ratio | 1.47 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.03% over the past year.
The Earnings Per Share has been growing by 9.07% on average over the past years. This is quite good.
Looking at the last year, YUM shows a small growth in Revenue. The Revenue has grown by 6.68% in the last year.
YUM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.17% yearly.
EPS 1Y (TTM)7.03%
EPS 3Y7.03%
EPS 5Y9.07%
EPS Q2Q%13.04%
Revenue 1Y (TTM)6.68%
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 11.09% yearly.
YUM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.48% yearly.
EPS Next Y11.18%
EPS Next 2Y11.19%
EPS Next 3Y11.27%
EPS Next 5Y11.09%
Revenue Next Year7.09%
Revenue Next 2Y6.67%
Revenue Next 3Y6.59%
Revenue Next 5Y7.48%
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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 25.58 indicates a quite expensive valuation of YUM.
Compared to the rest of the industry, the Price/Earnings ratio of YUM is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 26.20. YUM is around the same levels.
The Price/Forward Earnings ratio is 21.26, which indicates a rather expensive current valuation of YUM.
YUM's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of YUM to the average of the S&P500 Index (22.13), we can say YUM is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.58 | ||
| Fwd PE | 21.26 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, YUM is valued a bit more expensive than the industry average as 67.16% of the companies are valued more cheaply.
64.18% of the companies in the same industry are more expensive than YUM, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.96 | ||
| EV/EBITDA | 19.25 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
YUM has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.29
PEG (5Y)2.82
EPS Next 2Y11.19%
EPS Next 3Y11.27%
5. Dividend
5.1 Amount
YUM has a Yearly Dividend Yield of 1.93%.
Compared to an average industry Dividend Yield of 3.87, YUM pays a bit more dividend than its industry peers.
YUM's Dividend Yield is comparable with the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.93% |
5.2 History
On average, the dividend of YUM grows each year by 9.75%, which is quite nice.
YUM has paid a dividend for at least 10 years, which is 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 Years6
Div Non Decr Years6
5.3 Sustainability
50.61% 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 around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP50.61%
EPS Next 2Y11.19%
EPS Next 3Y11.27%
144.04
+0.89 (+0.62%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners86.51%
Inst Owner Change-1.69%
Ins Owners0.17%
Ins Owner Change2.9%
Market Cap40.04B
Analysts69.41
Price Target161.71 (12.27%)
Short Float %1.58%
Short Ratio1.87
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.93% |
Yearly Dividend2.69
Dividend Growth(5Y)9.75%
DP50.61%
Div Incr Years6
Div Non Decr Years6
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.11%
Min EPS beat(2)-4.11%
Max EPS beat(2)-0.11%
EPS beat(4)1
Avg EPS beat(4)-2.24%
Min EPS beat(4)-5.4%
Max EPS beat(4)0.66%
EPS beat(8)3
Avg EPS beat(8)-0.36%
EPS beat(12)4
Avg EPS beat(12)-1.11%
EPS beat(16)7
Avg EPS beat(16)2.05%
Revenue beat(2)0
Avg Revenue beat(2)-2.55%
Min Revenue beat(2)-4.8%
Max Revenue beat(2)-0.3%
Revenue beat(4)0
Avg Revenue beat(4)-3.95%
Min Revenue beat(4)-7.47%
Max Revenue beat(4)-0.3%
Revenue beat(8)1
Avg Revenue beat(8)-3.58%
Revenue beat(12)2
Avg Revenue beat(12)-2.49%
Revenue beat(16)4
Avg Revenue beat(16)-1.37%
PT rev (1m)1.81%
PT rev (3m)6.18%
EPS NQ rev (1m)0.15%
EPS NQ rev (3m)1.02%
EPS NY rev (1m)0.29%
EPS NY rev (3m)0.47%
Revenue NQ rev (1m)0.32%
Revenue NQ rev (3m)1.41%
Revenue NY rev (1m)-0.84%
Revenue NY rev (3m)-0.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.58 | ||
| Fwd PE | 21.26 | ||
| P/S | 5.3 | ||
| P/FCF | 27.96 | ||
| P/OCF | 23.7 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.25 |
EPS(TTM)5.63
EY3.91%
EPS(NY)6.77
Fwd EY4.7%
FCF(TTM)5.15
FCFY3.58%
OCF(TTM)6.08
OCFY4.22%
SpS27.16
BVpS-27.51
TBVpS-31.66
PEG (NY)2.29
PEG (5Y)2.82
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 22.09% | ||
| ROE | N/A | ||
| ROCE | 44.87% | ||
| ROIC | 37.25% | ||
| ROICexc | 41.99% | ||
| ROICexgc | 55.1% | ||
| OM | 32.44% | ||
| PM (TTM) | 19.68% | ||
| GM | 47.71% | ||
| FCFM | 18.97% |
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 Turnover1.12
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 7.91 | ||
| Debt/EBITDA | 4.31 | ||
| Cap/Depr | 146.86% | ||
| Cap/Sales | 3.4% | ||
| Interest Coverage | 4.8 | ||
| Cash Conversion | 64.37% | ||
| Profit Quality | 96.37% | ||
| Current Ratio | 1.47 | ||
| Quick Ratio | 1.47 | ||
| Altman-Z | 2.58 |
F-Score6
WACC8.6%
ROIC/WACC4.33
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 5Y11.09%
Revenue 1Y (TTM)6.68%
Revenue growth 3Y4.66%
Revenue growth 5Y6.17%
Sales Q2Q%11.83%
Revenue Next Year7.09%
Revenue Next 2Y6.67%
Revenue Next 3Y6.59%
Revenue Next 5Y7.48%
EBIT growth 1Y6.2%
EBIT growth 3Y6.16%
EBIT growth 5Y5.91%
EBIT Next Year12.4%
EBIT Next 3Y9.71%
EBIT Next 5Y8.96%
FCF growth 1Y8.65%
FCF growth 3Y-1%
FCF growth 5Y5.06%
OCF growth 1Y5.36%
OCF growth 3Y-0.33%
OCF growth 5Y5.13%