Stock Analysis

With 86% ownership, Yum! Brands, Inc. (NYSE:YUM) boasts of strong institutional backing

NYSE:YUM
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Key Insights

  • Given the large stake in the stock by institutions, Yum! Brands' stock price might be vulnerable to their trading decisions
  • A total of 7 investors have a majority stake in the company with 50% ownership
  • Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Yum! Brands, Inc. (NYSE:YUM), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 86% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

Let's delve deeper into each type of owner of Yum! Brands, beginning with the chart below.

Check out our latest analysis for Yum! Brands

ownership-breakdown
NYSE:YUM Ownership Breakdown January 7th 2025

What Does The Institutional Ownership Tell Us About Yum! Brands?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Yum! Brands. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Yum! Brands' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NYSE:YUM Earnings and Revenue Growth January 7th 2025

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in Yum! Brands. The company's largest shareholder is The Vanguard Group, Inc., with ownership of 12%. For context, the second largest shareholder holds about 10% of the shares outstanding, followed by an ownership of 8.8% by the third-largest shareholder.

We did some more digging and found that 7 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Yum! Brands

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that Yum! Brands, Inc. insiders own under 1% of the company. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own US$53m of stock. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 13% stake in Yum! Brands. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Yum! Brands better, we need to consider many other factors. For instance, we've identified 3 warning signs for Yum! Brands (2 make us uncomfortable) that you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.