NYSE:YUM

Stock Analysis Report

Executive Summary

YUM! Brands, Inc., together with its subsidiaries, develops, operates, and franchises quick service restaurants worldwide.

Rewards

Trading at 10.6% below its fair value

Earnings are forecast to grow 7.28% per year

Risk Analysis

Interest payments are not well covered by earnings

Unstable dividend track record



Snowflake Analysis

Average dividend payer with questionable track record.


Similar Companies

Share Price & News

How has YUM! Brands's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: YUM has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.4%

YUM

3.1%

US Hospitality

0.6%

US Market


1 Year Return

9.2%

YUM

18.1%

US Hospitality

20.8%

US Market

Return vs Industry: YUM underperformed the US Hospitality industry which returned 18.1% over the past year.

Return vs Market: YUM underperformed the US Market which returned 20.8% over the past year.


Shareholder returns

YUMIndustryMarket
7 Day1.4%3.1%0.6%
30 Day1.8%5.8%2.5%
90 Day-10.1%4.0%4.9%
1 Year11.0%9.2%21.2%18.1%23.5%20.8%
3 Year64.0%55.8%39.3%29.8%46.5%37.0%
5 Year115.4%40.7%49.0%33.4%64.6%46.5%

Price Volatility Vs. Market

How volatile is YUM! Brands's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is YUM! Brands undervalued compared to its fair value and its price relative to the market?

10.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: YUM ($100.11) is trading below our estimate of fair value ($111.96)

Significantly Below Fair Value: YUM is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: YUM is poor value based on its PE Ratio (27.1x) compared to the Hospitality industry average (23.3x).

PE vs Market: YUM is poor value based on its PE Ratio (27.1x) compared to the US market (18.6x).


Price to Earnings Growth Ratio

PEG Ratio: YUM is poor value based on its PEG Ratio (3.7x)


Price to Book Ratio

PB vs Industry: YUM has negative assets, so we can't compare its PB Ratio to the US Hospitality industry average.


Next Steps

Future Growth

How is YUM! Brands forecast to perform in the next 1 to 3 years based on estimates from 22 analysts?

7.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: YUM's forecast earnings growth (7.3% per year) is above the savings rate (1.7%).

Earnings vs Market: YUM's earnings (7.3% per year) are forecast to grow slower than the US market (14.4% per year).

High Growth Earnings: YUM's earnings are forecast to grow, but not significantly.

Revenue vs Market: YUM's revenue (5.2% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: YUM's revenue (5.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if YUM's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has YUM! Brands performed over the past 5 years?

8.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: YUM has high quality earnings.

Growing Profit Margin: YUM's current net profit margins (20.9%) are lower than last year (28.8%).


Past Earnings Growth Analysis

Earnings Trend: YUM's earnings have grown by 8.9% per year over the past 5 years.

Accelerating Growth: YUM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: YUM had negative earnings growth (-30.7%) over the past year, making it difficult to compare to the Hospitality industry average (-15.7%).


Return on Equity

High ROE: YUM's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is YUM! Brands's financial position?


Financial Position Analysis

Short Term Liabilities: YUM has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: YUM has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: YUM has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: YUM's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: YUM's debt is not well covered by operating cash flow (11.9%).

Interest Coverage: YUM's interest payments on its debt are not well covered by EBIT (2.9x coverage).


Balance Sheet

Inventory Level: YUM has a high level of physical assets or inventory.

Debt Coverage by Assets: YUM has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Next Steps

Dividend

What is YUM! Brands's current dividend yield, its reliability and sustainability?

1.68%

Current Dividend Yield


Dividend Yield vs Market

company1.7%marketbottom25%1.4%markettop25%3.7%industryaverage3.0%forecastin3Years1.8%

Current dividend yield vs market & industry

Notable Dividend: YUM's dividend (1.68%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: YUM's dividend (1.68%) is low compared to the top 25% of dividend payers in the US market (3.71%).


Stability and Growth of Payments

Stable Dividend: YUM's dividend payments have been volatile in the past 10 years.

Growing Dividend: YUM's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (45.5%), YUM's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: YUM's dividends in 3 years are forecast to be well covered by earnings (44.2% payout ratio).


Next Steps

Management

What is the CEO of YUM! Brands's salary, the management and board of directors tenure and is there insider trading?

3.6yrs

Average management tenure


CEO

Greg Creed (61yo)

4.9yrs

Tenure

US$14,007,038

Compensation

Mr. Greg Creed has been the Chief Executive Officer of Yum! Brands, Inc. since January 1, 2015. Mr. Creed served as the Chief Executive Officer of Taco Bell U. S., at Yum! Brands, Inc. from February 2011 t ...


CEO Compensation Analysis

Compensation vs Market: Greg's total compensation ($USD14.01M) is about average for companies of similar size in the US market ($USD10.94M).

Compensation vs Earnings: Greg's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.6yrs

Average Tenure

46yo

Average Age

Experienced Management: YUM's management team is considered experienced (3.6 years average tenure).


Board Age and Tenure

5.5yrs

Average Tenure

59.5yo

Average Age

Experienced Board: YUM's board of directors are considered experienced (5.5 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$1,331,71627 Aug 19
Greg Creed
EntityIndividual
Role
Chief Executive Officer
CEO & Non-Independent Director
Shares11,389
Max PriceUS$116.93
SellUS$669,02919 Aug 19
David Russell
EntityIndividual
Role
Controller
Senior VP of Finance & Corporate Controller
Shares5,801
Max PriceUS$115.33
BuyUS$249,88811 Feb 19
Tanya Domier
EntityIndividual
Shares2,652
Max PriceUS$94.23
SellUS$1,042,27908 Feb 19
David Gibbs
EntityIndividual
Role
Member of the Board of Directors
President
Shares11,081
Max PriceUS$94.06

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Greg Creed (61yo)

    CEO & Non-Independent Director

    • Tenure: 4.9yrs
    • Compensation: US$14.01m
  • Keith Siegner (44yo)

    VP of Investor Relations & Corporate Strategy and Treasurer

    • Tenure: 3.4yrs
  • Dave Russell (49yo)

    Senior VP of Finance & Corporate Controller

    • Tenure: 8.8yrs
    • Compensation: US$1.40m
  • David Gibbs (56yo)

    President

    • Tenure: 0.9yrs
    • Compensation: US$7.00m
  • Virginia Ferguson

    Senior Director of Public Relations

    • Tenure: 0yrs
  • Kevin Hochman

    Chief Concept Officer & President of KFC -US

    • Tenure: 0yrs
  • Tracy Skeans (46yo)

    Chief Transformation & People Officer

    • Tenure: 3.9yrs
    • Compensation: US$4.07m
  • Scott Catlett (43yo)

    General Counsel & Corporate Secretary

    • Tenure: 1.4yrs
  • Chris Turner (44yo)

    Chief Financial Officer

    • Tenure: 0.3yrs
  • Jerilan Greene

    Global Chief Communications & Public Affairs Officer

    • Tenure: 0yrs

Board Members

  • Tom Nelson (57yo)

    Independent Director

    • Tenure: 13.9yrs
    • Compensation: US$265.00k
  • Paget Alves (64yo)

    Independent Director

    • Tenure: 3.1yrs
    • Compensation: US$240.00k
  • Mike Cavanagh (53yo)

    Independent Director

    • Tenure: 7.1yrs
    • Compensation: US$240.00k
  • Bob Walter (73yo)

    Independent Non-Executive Director

    • Tenure: 11.6yrs
    • Compensation: US$405.00k
  • Mirian Graddick-Weir (64yo)

    Independent Director

    • Tenure: 7.9yrs
    • Compensation: US$240.00k
  • Brian Cornell (60yo)

    Independent Non-Executive Chairman

    • Tenure: 1.1yrs
    • Compensation: US$260.00k
  • Greg Creed (61yo)

    CEO & Non-Independent Director

    • Tenure: 4.9yrs
    • Compensation: US$14.01m
  • P. Skala (59yo)

    Independent Director

    • Tenure: 3.9yrs
    • Compensation: US$240.00k
  • Elane Stock (54yo)

    Independent Director

    • Tenure: 5.9yrs
    • Compensation: US$240.00k
  • David Gibbs (56yo)

    President

    • Tenure: 0.9yrs
    • Compensation: US$7.00m

Company Information

YUM! Brands, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: YUM! Brands, Inc.
  • Ticker: YUM
  • Exchange: NYSE
  • Founded: 1997
  • Industry: Restaurants
  • Sector: Consumer Services
  • Market Cap: US$30.279b
  • Shares outstanding: 302.46m
  • Website: https://www.yum.com

Number of Employees


Location

  • YUM! Brands, Inc.
  • 1441 Gardiner Lane
  • Louisville
  • Kentucky
  • 40213
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
YUMNYSE (New York Stock Exchange)YesCommon StockUSUSDSep 1997
TGRDB (Deutsche Boerse AG)YesCommon StockDEEURSep 1997
TGRXTRA (XETRA Trading Platform)YesCommon StockDEEURSep 1997
0QYDLSE (London Stock Exchange)YesCommon StockGBUSDSep 1997
YUMSWX (SIX Swiss Exchange)YesCommon StockCHCHFSep 1997
YUM *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNSep 1997
YUMWBAG (Wiener Boerse AG)YesCommon StockATEURSep 1997
TGRETLX (Eurotlx)YesCommon StockITEURSep 1997
YUMR34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 1 REP 0.5 COM NPVBRBRLMay 2019

Biography

YUM! Brands, Inc., together with its subsidiaries, develops, operates, and franchises quick service restaurants worldwide. It operates in three segments: the KFC Division, the Pizza Hut Division, and the T ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/13 23:51
End of Day Share Price2019/12/13 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.