YUM! BRANDS INC (YUM)
US9884981013 - Common Stock
We assign a fundamental rating of 5 out of 10 to YUM. YUM was compared to 135 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. YUM is quite expensive at the moment. 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.
In the past 5 years YUM always reported a positive cash flow from operatings.
1.2 Ratios
YUM has a Return On Assets of 25.88%. This is amongst the best in the industry. YUM outperforms 98.50% of its industry peers.
YUM has a Return On Invested Capital of 38.23%. This is amongst the best in the industry. YUM outperforms 97.74% of its industry peers.
The Average Return On Invested Capital over the past 3 years for YUM is significantly above the industry average of 10.05%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 25.88% | ||
| ROE | N/A | ||
| ROIC | 38.23% |
ROA(3y)24.9%
ROA(5y)22.98%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)40.71%
ROIC(5y)39.66%
1.3 Margins
YUM's Profit Margin of 22.92% is amongst the best of the industry. YUM outperforms 96.24% of its industry peers.
In the last couple of years the Profit Margin of YUM has declined.
YUM has a better Operating Margin (32.69%) than 96.24% of its industry peers.
In the last couple of years the Operating Margin of YUM has remained more or less at the same level.
The Gross Margin of YUM (49.58%) is comparable to the rest of the 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 | 32.69% | ||
| PM (TTM) | 22.92% | ||
| GM | 49.58% |
OM growth 3Y3.97%
OM growth 5Y1.1%
PM growth 3Y12.16%
PM growth 5Y-3.6%
GM growth 3Y1.29%
GM growth 5Y1.12%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so YUM is creating value.
Compared to 1 year ago, YUM has more shares outstanding
The number of shares outstanding for YUM has been reduced compared to 5 years ago.
YUM has a better debt/assets ratio than last year.
2.2 Solvency
YUM has an Altman-Z score of 2.49. 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.
Looking at the Altman-Z score, with a value of 2.49, YUM is in the better half of the industry, outperforming 74.44% of the companies in the same industry.
YUM has a debt to FCF ratio of 8.32. This is a slightly negative value and a sign of low solvency as YUM would need 8.32 years to pay back of all of its debts.
YUM has a Debt to FCF ratio of 8.32. This is in the better half of the industry: YUM outperforms 64.66% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 8.32 | ||
| Altman-Z | 2.49 |
ROIC/WACC4.61
WACC8.29%
2.3 Liquidity
A Current Ratio of 1.49 indicates that YUM should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.49, YUM is in the better half of the industry, outperforming 72.18% of the companies in the same industry.
YUM has a Quick Ratio of 1.49. This is a normal value and indicates that YUM is financially healthy and should not expect problems in meeting its short term obligations.
YUM's Quick ratio of 1.49 is fine compared to the rest of the industry. YUM outperforms 74.44% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.49 | ||
| Quick Ratio | 1.49 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 16.63% over the past year.
The Earnings Per Share has been growing by 10.35% 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 1.28% in the last year.
YUM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.46% yearly.
EPS 1Y (TTM)16.63%
EPS 3Y12.61%
EPS 5Y10.35%
EPS growth Q2Q8.49%
Revenue 1Y (TTM)1.28%
Revenue growth 3Y7.78%
Revenue growth 5Y4.46%
Revenue growth Q2Q-2.86%
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 12.71% yearly.
Based on estimates for the next years, YUM will show a small growth in Revenue. The Revenue will grow by 6.93% on average per year.
EPS Next Y13.1%
EPS Next 2Y12.76%
EPS Next 3Y12.89%
EPS Next 5Y12.71%
Revenue Next Year8.9%
Revenue Next 2Y7.79%
Revenue Next 3Y7.93%
Revenue Next 5Y6.93%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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 26.93 indicates a quite expensive valuation of YUM.
YUM's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of YUM to the average of the S&P500 Index (28.15), we can say YUM is valued inline with the index average.
With a Price/Forward Earnings ratio of 21.55, YUM is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of YUM is on the same level as its industry peers.
YUM's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 20.20.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.93 | ||
| Fwd PE | 21.55 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of YUM indicates a slightly more expensive valuation: YUM is more expensive than 70.68% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of YUM is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.63 | ||
| EV/EBITDA | 20.51 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates YUM does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of YUM may justify a higher PE ratio.
YUM's earnings are expected to grow with 12.89% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.06
PEG (5Y)2.6
EPS Next 2Y12.76%
EPS Next 3Y12.89%
5. Dividend
5.1 Amount
YUM has a Yearly Dividend Yield of 1.89%.
Compared to an average industry Dividend Yield of 2.76, YUM pays a better dividend. On top of this YUM pays more dividend than 80.45% of the companies listed in the same industry.
YUM's Dividend Yield is comparable with the S&P500 average which is at 2.33.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.89% |
5.2 History
On average, the dividend of YUM grows each year by 10.79%, which is quite nice.
YUM has paid a dividend for at least 10 years, which is a reliable track record.
YUM has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)10.79%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
YUM pays out 43.33% of its income as dividend. This is a bit on the high side, but may be sustainable.
YUM's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP43.33%
EPS Next 2Y12.76%
EPS Next 3Y12.89%
YUM! BRANDS INC
NYSE:YUM (5/17/2024, 7:04:00 PM)
After market: 141.01 -0.65 (-0.46%)141.66
0 (0%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap39.85B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.89% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
Avg Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.93 | ||
| Fwd PE | 21.55 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.06
PEG (5Y)2.6
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 25.88% | ||
| ROE | N/A | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 32.69% | ||
| PM (TTM) | 22.92% | ||
| GM | 49.58% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.13
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.49 | ||
| Quick Ratio | 1.49 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)16.63%
EPS 3Y12.61%
EPS 5Y
EPS growth Q2Q
EPS Next Y13.1%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)1.28%
Revenue growth 3Y7.78%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y