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Yum! Brands, Inc. (YUM)

Yum! Brands, Inc. (YUM). by Amanda Fitzpatrick. Overview. Yum! Brands, Inc. is a “quick service” restaurant company Operates restaurants in the U.S., as well as internationally Franchise and license a system of restaurants which sell and prepare various foods items

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Yum! Brands, Inc. (YUM)

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  1. Yum! Brands, Inc.(YUM) by Amanda Fitzpatrick

  2. Overview • Yum! Brands, Inc. is a “quick service” restaurant company • Operates restaurants in the U.S., as well as internationally • Franchise and license a system of restaurants which sell and prepare various foods items • Restaurants include: KFC, Taco Bell, Long John Silvers, Pizza Hut, and A&W All-American Food • Market Cap.: $24.33 B • 52 week range: $46.27-$57.75 • Annual Dividend Rate: $1.14 • Traded on NYSE

  3. Key Statistics • P/E: 20.2 Industry: 20.2 • Debt/Equity: 154.92 Industry: 84.22 • EPS Growth 5 Yr: 13.3 Industry: 19.93 • Net Profit Margin: 10.24 Industry: 4.69 • ROE: 69.71 (TTM) Industry: 25.62 (TTM) • Recent Price : $52.84 (fair value= $56.00) • Purchase Price : $29.07 • Shares : 54 • YTD Return: 4.2% • Holding Return:75.89%

  4. Recent News • October 2011- dividends go up by 14%, $.285 quarterly • Sept. 22, 2011- announced agreements to sell Long John Silver’s and A&W All-American Restaurants to two key franchisees (LJS Partners LLC and A Great American Brand LLC) • Strong international development with 331 new restaurants opened, including 138 new units in China • are now expecting to open 600 new units in China this year

  5. Stock Evaluation

  6. Chart- 5 years $29.07

  7. Chart- 1 year

  8. Analysts Recommendations • Strong Buy: 7 • Buy: 7 • Hold: 7 • Underperform: 1 • Sell: 0

  9. Recommendation • Hold • Even though it only meets 5/10 of our investment criteria, should hold because: • Good dividends • dividend yield= 2%, $1.14 annually/share • $1.14 * 54 = $61.56/ annually • Global expansion into China

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