YUM! BRANDS INC (YUM) Stock Fundamental Analysis
NYSE:YUM - New York Stock Exchange, Inc. - US9884981013 - Common Stock - Currency: USD
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. YUM scores excellent on profitability, but 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.
YUM had a positive operating cash flow in the past year.
In the past 5 years YUM has always been profitable.
In the past 5 years YUM always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 22.09%, YUM belongs to the best of the industry, outperforming 97.71% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 36.89%, YUM belongs to the top of the industry, outperforming 96.95% 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 16.02%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 22.09% | ||
| ROE | N/A | ||
| ROIC | 36.89% |
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's Profit Margin of 19.68% is amongst the best of the industry. YUM outperforms 93.13% of its industry peers.
YUM's Profit Margin has declined in the last couple of years.
YUM has a Operating Margin of 32.12%. This is amongst the best in the industry. YUM outperforms 98.47% 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 (47.48%) 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 | 32.12% | ||
| PM (TTM) | 19.68% | ||
| GM | 47.48% |
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
YUM has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
YUM has less shares outstanding than it did 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
An Altman-Z score of 2.73 indicates that YUM is not a great score, but indicates only limited risk for bankruptcy at the moment.
YUM's Altman-Z score of 2.73 is fine compared to the rest of the industry. YUM outperforms 74.05% of its industry peers.
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.
YUM has a Debt to FCF ratio of 7.91. This is in the better half of the industry: YUM outperforms 64.12% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 7.91 | ||
| Altman-Z | 2.73 |
ROIC/WACC4.08
WACC9.05%
2.3 Liquidity
A Current Ratio of 1.47 indicates that YUM should not have too much problems paying its short term obligations.
With a decent Current ratio value of 1.47, YUM is doing good in the industry, outperforming 69.47% of the companies in the same industry.
A Quick Ratio of 1.47 indicates that YUM should not have too much problems paying its short term obligations.
YUM has a Quick ratio of 1.47. This is in the better half of the industry: YUM outperforms 74.05% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.47 | ||
| Quick Ratio | 1.47 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.00% over the past year.
YUM shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.07% yearly.
YUM shows a small growth in Revenue. In the last year, the Revenue has grown by 6.68%.
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
The Earnings Per Share is expected to grow by 10.03% on average over the next years. This is quite good.
YUM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.89% yearly.
EPS Next Y10.65%
EPS Next 2Y11.32%
EPS Next 3Y11.57%
EPS Next 5Y10.03%
Revenue Next Year7.34%
Revenue Next 2Y6.76%
Revenue Next 3Y6.56%
Revenue Next 5Y6.89%
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 stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 28.64 indicates a quite expensive valuation of YUM.
YUM's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 29.98. YUM is around the same levels.
The Price/Forward Earnings ratio is 25.88, which means the current valuation is very expensive for YUM.
Compared to the rest of the industry, the Price/Forward Earnings ratio of YUM is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of YUM to the average of the S&P500 Index (22.66), we can say YUM is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.64 | ||
| Fwd PE | 25.88 |
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 68.70% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, YUM is valued a bit cheaper than 65.65% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.58 | ||
| EV/EBITDA | 20.9 |
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)2.69
PEG (5Y)3.16
EPS Next 2Y11.32%
EPS Next 3Y11.57%
5. Dividend
5.1 Amount
YUM has a Yearly Dividend Yield of 1.89%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.13, YUM pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.30, YUM has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.89% |
5.2 History
On average, the dividend of YUM grows each year by 9.75%, which is quite nice.
YUM has paid a dividend for at least 10 years, which is a reliable track record.
As YUM did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)9.75%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
50.61% of the earnings are spent on dividend by YUM. 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 2Y11.32%
EPS Next 3Y11.57%
156.93
+0.56 (+0.36%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners86.51%
Inst Owner Change-0.67%
Ins Owners0.17%
Ins Owner Change5.92%
Market Cap43.78B
Analysts68.82
Price Target152.3 (-2.95%)
Short Float %2.24%
Short Ratio3.24
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.89% |
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)4.75%
PT rev (3m)3.65%
EPS NQ rev (1m)0.01%
EPS NQ rev (3m)-2.04%
EPS NY rev (1m)0.12%
EPS NY rev (3m)-1.32%
Revenue NQ rev (1m)2.26%
Revenue NQ rev (3m)1.48%
Revenue NY rev (1m)0.63%
Revenue NY rev (3m)0.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.64 | ||
| Fwd PE | 25.88 | ||
| P/S | 5.8 | ||
| P/FCF | 30.58 | ||
| P/OCF | 25.92 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.9 |
EPS(TTM)5.48
EY3.49%
EPS(NY)6.06
Fwd EY3.86%
FCF(TTM)5.13
FCFY3.27%
OCF(TTM)6.05
OCFY3.86%
SpS27.06
BVpS-27.41
TBVpS-31.54
PEG (NY)2.69
PEG (5Y)3.16
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 22.09% | ||
| ROE | N/A | ||
| ROCE | 44.43% | ||
| ROIC | 36.89% | ||
| ROICexc | 41.58% | ||
| ROICexgc | 54.56% | ||
| OM | 32.12% | ||
| PM (TTM) | 19.68% | ||
| GM | 47.48% | ||
| 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 | 4.35 | ||
| Cap/Depr | 146.86% | ||
| Cap/Sales | 3.4% | ||
| Interest Coverage | 4.75 | ||
| Cash Conversion | 64.96% | ||
| Profit Quality | 96.37% | ||
| Current Ratio | 1.47 | ||
| Quick Ratio | 1.47 | ||
| Altman-Z | 2.73 |
F-Score6
WACC9.05%
ROIC/WACC4.08
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 Y10.65%
EPS Next 2Y11.32%
EPS Next 3Y11.57%
EPS Next 5Y10.03%
Revenue 1Y (TTM)6.68%
Revenue growth 3Y4.66%
Revenue growth 5Y6.17%
Sales Q2Q%16.01%
Revenue Next Year7.34%
Revenue Next 2Y6.76%
Revenue Next 3Y6.56%
Revenue Next 5Y6.89%
EBIT growth 1Y5.16%
EBIT growth 3Y6.16%
EBIT growth 5Y5.91%
EBIT Next Year11.06%
EBIT Next 3Y9.11%
EBIT Next 5Y9.08%
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%