Stock of the Day

December 30, 2019

Yum! Brands (YUM)

$148.51
-$2.45 (-1.6%)
Market Cap: $42.13B

About Yum! Brands

Yum! Brands, Inc., together with its subsidiaries, develops, operates, and franchises quick service restaurants worldwide. The company operates through the KFC Division, the Taco Bell Division, the Pizza Hut Division, and the Habit Burger Grill Division segments. It also operates restaurants under the KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill brands, which specialize in chicken, pizza, made-to-order chargrilled burgers, sandwiches, Mexican-style food categories, and other food products. The company was formerly known as TRICON Global Restaurants, Inc. and changed its name to Yum! Brands, Inc. in May 2002. Yum! Brands, Inc. was incorporated in 1997 and is headquartered in Louisville, Kentucky.

Yum! Brands Bull Case

Here are some ways that investors could benefit from investing in Yum! Brands, Inc.:

  • The stock is currently trading at $147.80, which is close to its 12-month high of $149.30, indicating strong market performance and investor confidence.
  • Yum! Brands, Inc. has recently increased its quarterly dividend from $0.67 to $0.71, reflecting a commitment to returning value to shareholders. This translates to an annualized dividend of $2.84, providing a yield of approximately 1.92%.
  • Analysts have a consensus rating of "Hold" for Yum! Brands, Inc., with a price target averaging $147.37, suggesting that the stock is fairly valued and may have potential for stability.
  • The company operates multiple well-known brands, including KFC, Taco Bell, and Pizza Hut, which diversifies its revenue streams and reduces risk associated with reliance on a single brand.
  • Yum! Brands, Inc. has a solid market capitalization of approximately $41.25 billion, indicating a strong position in the market and the ability to invest in growth opportunities.

Yum! Brands Bear Case

Investors should be bearish about investing in Yum! Brands, Inc. for these reasons:

  • Recent analyst reports have shown mixed sentiments, with some firms lowering their price targets, indicating potential volatility in the stock price.
  • The company's P/E ratio is 28.31, which may suggest that the stock is overvalued compared to its earnings, potentially limiting future price appreciation.
  • Insider trading activity has shown a decrease in ownership, with the CEO selling shares, which could signal a lack of confidence in the company's short-term performance.
  • Yum! Brands, Inc. has a relatively high PEG ratio of 2.36, indicating that the stock may be expensive relative to its growth rate, which could deter value-focused investors.
  • With a dividend payout ratio of 51.34%, there may be concerns about the sustainability of future dividend increases, especially in a fluctuating market environment.

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