Yum Brands Inc
Exchange: NYSESector: Consumer CyclicalIndustry: Restaurants
YUM! Brands, Inc. (YUM) is a quick service restaurant company based on number of system units, with over 39,000 units in more than 125 countries and territories. The Company, through three concepts of KFC, Pizza Hut and Taco Bell (Concepts) develops, operates, franchises and licenses a worldwide system of restaurants, which prepare, package and sell a menu of priced food items. The Company operates in six segments: YUM Restaurants China (China or China Division), YUM Restaurants International (YRI or International Division), Taco Bell U.S., KFC U.S., Pizza Hut U.S. and YUM Restaurants India (India or India Division). The China Division includes mainland China, and the India Division includes India, Bangladesh, Mauritius, Nepal and Sri Lanka. YRI includes the remainder of its international operations.
Did you know?
Carries 16.8x more debt than cash on its balance sheet.
Current Price
$154.40
-2.50%GoodMoat Value
$114.02
26.2% overvaluedProfile
Valuation (TTM)
Market Cap$42.87B
P/E27.50
EV$55.22B
P/B—
Shares Out277.65M
P/Sales5.22
Revenue$8.21B
EV/EBITDA19.44
Yum Brands Inc (YUM) Stock Analysis
GoodMoat Analysis
Yum Brands is a global restaurant franchisor with a powerful brand portfolio, but its valuation appears stretched relative to its moderate growth. The current price is significantly above the GoodMoat target, suggesting a low margin of safety for a value investor.
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Yum Brands Inc operates a massive global franchise system for its iconic brands: KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill. Its primary business model is franchising, which generates high-margin royalty and fee income from over 55,000 restaurants worldwide. This structure provides an asset-light, cash-generative operation, as evidenced by its strong 31.4% operating margin.
Applying the GoodMoat framework, the company demonstrates several competitive advantages. It scores well on Brand & Culture, given the global recognition of its core brands, and benefits from Scale Privilege through its vast, established franchise network. Its franchising model also creates Switching Costs for franchisees and provides a degree of Pricing Power. However, the business faces high Disruption Risk from a crowded, competitive landscape and has limited Network Effects or Proprietary Data advantages. Its moderate 6.5% revenue growth reflects a mature, rather than hyper-growth, profile.
For a value investor, the primary concern is valuation. The stock trades at a P/E of 28.3x, which is high for a single-digit revenue grower. The provided GoodMoat Target of $114.02 implies the current price of $159.16 is at a significant premium, offering a negative margin of safety. Following the Decision Framework, while the business likely passes the Moat & Quality Gate, it likely fails the Valuation & Risk Gate. The combination of a full valuation and growth deceleration warrants a cautious view, suggesting the stock is unfavourable at this price for a value-oriented entry point.
Analysis based on data as of 2024-05-15.
Market Cap$42.87B
Current Price$154.40
P/E Ratio27.50
Forward P/E—
PEG Ratio1.01
EPS$5.55
Book Value$-26.38
P/B Ratio—
YUM Financial Charts
FCF vs CAPEX
FCFCAPEX
Forward estimates use 6.6% FCF growth (CAGR)
Cash vs Debt
Net Debt: 11.2B
Revenue
5.6B
FY19
5.7B
FY20
6.6B
FY21
6.8B
FY22
7.1B
FY23
7.5B
FY24
8.2B
FY25
Net Income
1.3B
FY19
904M
FY20
1.6B
FY21
1.3B
FY22
1.6B
FY23
1.5B
FY24
1.6B
FY25
YUM 52-Week Range
$136.40
$168.16
50-Day MA: $159.64200-Day MA: $151.22
Did you know?
Profit margin stands at 19.0%.
Yum Brands Inc (YUM) Financial Summary
Yum Brands Inc (YUM) is a Consumer Cyclical company in the Restaurants industry, listed on NYSE. The stock currently trades at $154.40 with a market capitalization of $42.87B.
Key valuation metrics include a P/E ratio of 27.50, and EPS of $5.55. The company reports a profit margin of 19.0%.
YUM Key Financial Metrics
| Metric | Value |
|---|---|
| Market Cap | $42.87B |
| P/E Ratio | 27.50 |
| EPS | $5.55 |
| P/S Ratio | 5.22 |
| EV/EBITDA | 19.44 |
| Dividend Yield | 1.84% |
| Profit Margin | 19.0% |
YUM Revenue & Earnings History
| Year | Revenue | Net Income |
|---|---|---|
| FY19 | $5.60B | $1.29B |
| FY20 | $5.65B | $904.00M |
| FY21 | $6.58B | $1.57B |
| FY22 | $6.84B | $1.32B |
| FY23 | $7.08B | $1.60B |
| FY24 | $7.55B | $1.49B |
| FY25 | $8.21B | $1.56B |
Yum Brands Inc (YUM) Valuation
Based on GoodMoat's DCF model, Yum Brands Inc has a fair value estimate of $114.02. At the current price of $154.40, the stock appears 35.4% overvalued relative to our intrinsic value estimate.
YUM Quality Indicators
Yum Brands Inc maintains a profit margin of 19.0% and an operating margin of 31.4%. The current ratio is 1.35.
About Yum Brands Inc
YUM! Brands, Inc. (YUM) is a quick service restaurant company based on number of system units, with over 39,000 units in more than 125 countries and territories. The Company, through three concepts of KFC, Pizza Hut and Taco Bell (Concepts) develops, operates, franchises and licenses a worldwide system of restaurants, which prepare, package and sell a menu of priced food items. The Company operates in six segments: YUM Restaurants China (China or China Division), YUM Restaurants International (YRI or International Division), Taco Bell U.S., KFC U.S., Pizza Hut U.S. and YUM Restaurants India (India or India Division). The China Division includes mainland China, and the India Division includes India, Bangladesh, Mauritius, Nepal and Sri Lanka. YRI includes the remainder of its international operations.
YUM Free Cash Flow
Yum Brands Inc generated $1.64B in trailing twelve-month free cash flow, representing an FCF yield of 3.82%. This moderate FCF yield indicates reasonable cash generation.
YUM Shares Outstanding
Yum Brands Inc has 0.28 billion shares outstanding at a share price of $154.40, giving it a market capitalization of $42.87B.
YUM Recent Insider Trades
Recent insider transactions at Yum Brands Inc include:
| Insider | Type | Shares | Value |
|---|---|---|---|
| Turner Christopher Lee (CEO, Chairman of Board) | SELL | 250 | $40120.00 |
| Mezvinsky Scott (KFC Division CEO) | SELL | 277 | $44452.96 |
| Mezvinsky Scott (KFC Division CEO) | SELL | 271 | $41782.78 |