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 5 out of 10 in our fundamental rating. YUM was compared to 131 industry peers in the Hotels, Restaurants & Leisure industry. YUM has an excellent profitability rating, 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.
YUM had positive earnings in each of the past 5 years.
YUM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 20.70%, YUM belongs to the best of the industry, outperforming 96.95% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 44.91%, YUM belongs to the top of the industry, outperforming 97.71% 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 15.80%.
The last Return On Invested Capital (44.91%) for YUM is above the 3 year average (40.31%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.7% | ||
| ROE | N/A | ||
| ROIC | 44.91% |
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
With an excellent Profit Margin value of 18.11%, YUM belongs to the best of the industry, outperforming 91.60% of the companies in the same industry.
YUM's Profit Margin has declined in the last couple of years.
YUM has a Operating Margin of 32.07%. This is amongst the best in the industry. YUM outperforms 97.71% of its industry peers.
In the last couple of years the Operating Margin of YUM has remained more or less at the same level.
YUM has a Gross Margin (46.48%) which is in line with its industry peers.
YUM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 32.07% | ||
| PM (TTM) | 18.11% | ||
| GM | 46.48% |
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.
YUM has less shares outstanding than it did 1 year ago.
The number of shares outstanding for YUM has been reduced compared to 5 years ago.
Compared to 1 year ago, YUM has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.41 indicates that YUM is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.41, YUM is in the better half of the industry, outperforming 61.83% of the companies in the same industry.
YUM has a debt to FCF ratio of 7.42. This is a slightly negative value and a sign of low solvency as YUM would need 7.42 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 7.42, YUM is doing good in the industry, outperforming 70.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 7.42 | ||
| Altman-Z | 2.41 |
ROIC/WACC5.13
WACC8.76%
2.3 Liquidity
A Current Ratio of 0.82 indicates that YUM may have some problems paying its short term obligations.
With a Current ratio value of 0.82, YUM perfoms like the industry average, outperforming 43.51% of the companies in the same industry.
A Quick Ratio of 0.82 indicates that YUM may have some problems paying its short term obligations.
With a Quick ratio value of 0.82, YUM perfoms like the industry average, outperforming 48.09% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.82 | ||
| Quick Ratio | 0.82 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 10.00% 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 quite strong growth in Revenue. The Revenue has grown by 11.30% in the last year.
The Revenue has been growing slightly by 6.17% on average over the past years.
EPS 1Y (TTM)10%
EPS 3Y7.03%
EPS 5Y9.07%
EPS Q2Q%6.67%
Revenue 1Y (TTM)11.3%
Revenue growth 3Y4.66%
Revenue growth 5Y6.17%
Sales Q2Q%9.64%
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 12.17% yearly.
The Revenue is expected to grow by 7.04% on average over the next years.
EPS Next Y11.14%
EPS Next 2Y11.27%
EPS Next 3Y11.39%
EPS Next 5Y12.17%
Revenue Next Year7.19%
Revenue Next 2Y6.76%
Revenue Next 3Y6.76%
Revenue Next 5Y7.04%
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 24.92.
YUM's Price/Earnings is on the same level as the industry average.
YUM is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.54, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 21.01 indicates a rather expensive valuation of YUM.
YUM's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of YUM to the average of the S&P500 Index (35.28), we can say YUM is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.92 | ||
| Fwd PE | 21.01 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, YUM is valued a bit more expensive than 63.36% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of YUM indicates a somewhat cheap valuation: YUM is cheaper than 66.41% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.81 | ||
| EV/EBITDA | 18.35 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of YUM may justify a higher PE ratio.
PEG (NY)2.24
PEG (5Y)2.75
EPS Next 2Y11.27%
EPS Next 3Y11.39%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.96%, YUM has a reasonable but not impressive dividend return.
YUM's Dividend Yield is a higher than the industry average which is at 6.38.
YUM's Dividend Yield is comparable with the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.96% |
5.2 History
The dividend of YUM is nicely growing with an annual growth rate of 9.75%!
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
YUM pays out 53.77% of its income as dividend. This is a bit on the high side, but may be sustainable.
YUM's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP53.77%
EPS Next 2Y11.27%
EPS Next 3Y11.39%
142.56
+1.22 (+0.86%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners85.29%
Inst Owner Change0.36%
Ins Owners0.13%
Ins Owner Change-1.79%
Market Cap39.63B
Analysts70.86
Price Target163.22 (14.49%)
Short Float %1.78%
Short Ratio2.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.96% |
Yearly Dividend2.69
Dividend Growth(5Y)9.75%
DP53.77%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.22%
Min EPS beat(2)-2.34%
Max EPS beat(2)-0.09%
EPS beat(4)0
Avg EPS beat(4)-1.66%
Min EPS beat(4)-4.11%
Max EPS beat(4)-0.09%
EPS beat(8)2
Avg EPS beat(8)-1.33%
EPS beat(12)4
Avg EPS beat(12)-0.67%
EPS beat(16)5
Avg EPS beat(16)-0.74%
Revenue beat(2)0
Avg Revenue beat(2)-2.86%
Min Revenue beat(2)-4.49%
Max Revenue beat(2)-1.23%
Revenue beat(4)0
Avg Revenue beat(4)-2.7%
Min Revenue beat(4)-4.8%
Max Revenue beat(4)-0.3%
Revenue beat(8)0
Avg Revenue beat(8)-3.8%
Revenue beat(12)2
Avg Revenue beat(12)-2.52%
Revenue beat(16)2
Avg Revenue beat(16)-2.25%
PT rev (1m)0.06%
PT rev (3m)2.94%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.41%
EPS NY rev (1m)0.01%
EPS NY rev (3m)0.26%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.76%
Revenue NY rev (1m)0.1%
Revenue NY rev (3m)-0.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.92 | ||
| Fwd PE | 21.01 | ||
| P/S | 5.01 | ||
| P/FCF | 25.81 | ||
| P/OCF | 21.59 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.35 |
EPS(TTM)5.72
EY4.01%
EPS(NY)6.78
Fwd EY4.76%
FCF(TTM)5.52
FCFY3.87%
OCF(TTM)6.6
OCFY4.63%
SpS28.45
BVpS-27.63
TBVpS-32.11
PEG (NY)2.24
PEG (5Y)2.75
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.7% | ||
| ROE | N/A | ||
| ROCE | 54.1% | ||
| ROIC | 44.91% | ||
| ROICexc | 52.49% | ||
| ROICexgc | 76.15% | ||
| OM | 32.07% | ||
| PM (TTM) | 18.11% | ||
| GM | 46.48% | ||
| FCFM | 19.41% |
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 Turnover1.14
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 7.42 | ||
| Debt/EBITDA | 3.82 | ||
| Cap/Depr | 159.57% | ||
| Cap/Sales | 3.79% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 67.36% | ||
| Profit Quality | 107.19% | ||
| Current Ratio | 0.82 | ||
| Quick Ratio | 0.82 | ||
| Altman-Z | 2.41 |
F-Score6
WACC8.76%
ROIC/WACC5.13
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)10%
EPS 3Y7.03%
EPS 5Y9.07%
EPS Q2Q%6.67%
EPS Next Y11.14%
EPS Next 2Y11.27%
EPS Next 3Y11.39%
EPS Next 5Y12.17%
Revenue 1Y (TTM)11.3%
Revenue growth 3Y4.66%
Revenue growth 5Y6.17%
Sales Q2Q%9.64%
Revenue Next Year7.19%
Revenue Next 2Y6.76%
Revenue Next 3Y6.76%
Revenue Next 5Y7.04%
EBIT growth 1Y8.42%
EBIT growth 3Y6.16%
EBIT growth 5Y5.91%
EBIT Next Year12.67%
EBIT Next 3Y9.92%
EBIT Next 5Y9.2%
FCF growth 1Y20.02%
FCF growth 3Y-1%
FCF growth 5Y5.06%
OCF growth 1Y15.92%
OCF growth 3Y-0.33%
OCF growth 5Y5.13%