YUM! BRANDS INC (YUM) Stock Fundamental Analysis
NYSE:YUM - New York Stock Exchange, Inc. - US9884981013 - Common Stock - Currency: USD
YUM gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 136 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 valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
YUM had positive earnings in the past year.
YUM had a positive operating cash flow in the past year.
In the past 5 years YUM has always been profitable.
Each year in the past 5 years YUM had a positive operating cash flow.
1.2 Ratios
YUM has a Return On Assets of 22.09%. This is amongst the best in the industry. YUM outperforms 97.79% of its industry peers.
With an excellent Return On Invested Capital value of 37.25%, YUM belongs to the best of the industry, outperforming 97.06% 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 15.70%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 22.09% | ||
| ROE | N/A | ||
| ROIC | 37.25% |
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
YUM has a better Profit Margin (19.68%) than 94.12% of its industry peers.
In the last couple of years the Profit Margin of YUM has declined.
Looking at the Operating Margin, with a value of 32.44%, YUM belongs to the top of the industry, outperforming 98.53% of the companies in the same industry.
YUM's Operating Margin has been stable in the last couple of years.
With a Gross Margin value of 47.71%, YUM perfoms like the industry average, outperforming 52.21% of the companies in the same industry.
YUM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 32.44% | ||
| PM (TTM) | 19.68% | ||
| GM | 47.71% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so YUM is creating value.
The number of shares outstanding for YUM has been reduced compared to 1 year ago.
YUM has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, YUM has an improved debt to assets ratio.
2.2 Solvency
YUM has an Altman-Z score of 2.59. 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.
With a decent Altman-Z score value of 2.59, YUM is doing good in the industry, outperforming 75.74% of the companies in the same industry.
YUM has a debt to FCF ratio of 7.91. This is a slightly negative value and a sign of low solvency as YUM would need 7.91 years to pay back of all of its debts.
The Debt to FCF ratio of YUM (7.91) is better than 65.44% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 7.91 | ||
| Altman-Z | 2.59 |
ROIC/WACC4.36
WACC8.54%
2.3 Liquidity
A Current Ratio of 1.47 indicates that YUM should not have too much problems paying its short term obligations.
YUM has a better Current ratio (1.47) than 71.32% of its industry peers.
YUM has a Quick Ratio of 1.47. This is a normal value and indicates that YUM is financially healthy and should not expect problems in meeting its short term obligations.
YUM has a Quick ratio of 1.47. This is in the better half of the industry: YUM outperforms 73.53% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.47 | ||
| Quick Ratio | 1.47 |
3. Growth
3.1 Past
YUM shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.00%.
The Earnings Per Share has been growing by 9.07% on average over the past years. This is quite good.
The Revenue has been growing slightly by 6.68% in the past year.
The Revenue has been growing slightly by 6.17% on average over the past years.
EPS 1Y (TTM)6%
EPS 3Y7.03%
EPS 5Y9.07%
EPS Q2Q%27.78%
Revenue 1Y (TTM)6.68%
Revenue growth 3Y4.66%
Revenue growth 5Y6.17%
Sales Q2Q%16.01%
3.2 Future
Based on estimates for the next years, YUM will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.09% on average per year.
YUM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.48% yearly.
EPS Next Y11.11%
EPS Next 2Y11.57%
EPS Next 3Y11.79%
EPS Next 5Y11.09%
Revenue Next Year7.92%
Revenue Next 2Y7.08%
Revenue Next 3Y6.68%
Revenue Next 5Y7.48%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 26.15, which means the current valuation is very expensive for YUM.
YUM's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 28.29, YUM is valued at the same level.
With a Price/Forward Earnings ratio of 23.54, YUM is valued on the expensive side.
YUM's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 21.08. YUM is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.15 | ||
| Fwd PE | 23.54 |
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 66.91% of the companies listed 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 60.29% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.87 | ||
| EV/EBITDA | 19.3 |
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)2.35
PEG (5Y)2.88
EPS Next 2Y11.57%
EPS Next 3Y11.79%
5. Dividend
5.1 Amount
YUM has a Yearly Dividend Yield of 1.95%. Purely for dividend investing, there may be better candidates out there.
YUM's Dividend Yield is a higher than the industry average which is at 3.96.
YUM's Dividend Yield is slightly below the S&P500 average, which is at 2.57.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.95% |
5.2 History
The dividend of YUM is nicely growing with an annual growth rate of 9.75%!
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)9.75%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
YUM pays out 50.61% 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.
DP50.61%
EPS Next 2Y11.57%
EPS Next 3Y11.79%
143.31
+0.74 (+0.52%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners86.51%
Inst Owner Change0%
Ins Owners0.17%
Ins Owner Change2.57%
Market Cap39.91B
Analysts69.41
Price Target158.84 (10.84%)
Short Float %2.52%
Short Ratio3.16
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.95% |
Yearly Dividend2.69
Dividend Growth(5Y)9.75%
DP50.61%
Div Incr Years6
Div Non Decr Years6
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.11%
Min EPS beat(2)-4.11%
Max EPS beat(2)-0.11%
EPS beat(4)1
Avg EPS beat(4)-2.24%
Min EPS beat(4)-5.4%
Max EPS beat(4)0.66%
EPS beat(8)3
Avg EPS beat(8)-0.36%
EPS beat(12)4
Avg EPS beat(12)-1.11%
EPS beat(16)7
Avg EPS beat(16)2.05%
Revenue beat(2)0
Avg Revenue beat(2)-2.55%
Min Revenue beat(2)-4.8%
Max Revenue beat(2)-0.3%
Revenue beat(4)0
Avg Revenue beat(4)-3.95%
Min Revenue beat(4)-7.47%
Max Revenue beat(4)-0.3%
Revenue beat(8)1
Avg Revenue beat(8)-3.58%
Revenue beat(12)2
Avg Revenue beat(12)-2.49%
Revenue beat(16)4
Avg Revenue beat(16)-1.37%
PT rev (1m)3.35%
PT rev (3m)7.98%
EPS NQ rev (1m)0.09%
EPS NQ rev (3m)-1.07%
EPS NY rev (1m)0.41%
EPS NY rev (3m)-0.8%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.02%
Revenue NY rev (1m)0.21%
Revenue NY rev (3m)1.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.15 | ||
| Fwd PE | 23.54 | ||
| P/S | 5.29 | ||
| P/FCF | 27.87 | ||
| P/OCF | 23.63 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.3 |
EPS(TTM)5.48
EY3.82%
EPS(NY)6.09
Fwd EY4.25%
FCF(TTM)5.14
FCFY3.59%
OCF(TTM)6.06
OCFY4.23%
SpS27.1
BVpS-27.46
TBVpS-31.6
PEG (NY)2.35
PEG (5Y)2.88
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 22.09% | ||
| ROE | N/A | ||
| ROCE | 44.87% | ||
| ROIC | 37.25% | ||
| ROICexc | 41.99% | ||
| ROICexgc | 55.1% | ||
| OM | 32.44% | ||
| PM (TTM) | 19.68% | ||
| GM | 47.71% | ||
| FCFM | 18.97% |
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 Turnover1.12
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 7.91 | ||
| Debt/EBITDA | 4.31 | ||
| Cap/Depr | 146.86% | ||
| Cap/Sales | 3.4% | ||
| Interest Coverage | 4.8 | ||
| Cash Conversion | 64.37% | ||
| Profit Quality | 96.37% | ||
| Current Ratio | 1.47 | ||
| Quick Ratio | 1.47 | ||
| Altman-Z | 2.59 |
F-Score6
WACC8.54%
ROIC/WACC4.36
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)6%
EPS 3Y7.03%
EPS 5Y9.07%
EPS Q2Q%27.78%
EPS Next Y11.11%
EPS Next 2Y11.57%
EPS Next 3Y11.79%
EPS Next 5Y11.09%
Revenue 1Y (TTM)6.68%
Revenue growth 3Y4.66%
Revenue growth 5Y6.17%
Sales Q2Q%16.01%
Revenue Next Year7.92%
Revenue Next 2Y7.08%
Revenue Next 3Y6.68%
Revenue Next 5Y7.48%
EBIT growth 1Y6.2%
EBIT growth 3Y6.16%
EBIT growth 5Y5.91%
EBIT Next Year13.69%
EBIT Next 3Y10.15%
EBIT Next 5Y8.96%
FCF growth 1Y8.65%
FCF growth 3Y-1%
FCF growth 5Y5.06%
OCF growth 1Y5.36%
OCF growth 3Y-0.33%
OCF growth 5Y5.13%