NYSE:YUM
$34.46
(8/17 1:58PM)
-1.4%
| Open | $34.39 |
Mkt Cap | $16.3 Billion |
| High | $34.62 |
52Wk High | $40.25 |
| Low | $34.07 |
52Wk Low | $21.50 |
| Volume | 2.0 Million |
Avg Vol 10D | 4.1 Million |
Ockham’s Rating
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YUM Revenue
For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at YUM through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 1.74x and 1.14x respectively.
Utilizing this range we can see that YUM’s current Price to Sales per share ratio of 1.55x is above its historical average only slightly. So, while not a major concern it is worth noting that from a value perspective YUM does not look undervalued on a Price to Sales basis. However, were the Price to Sales ratio to drop by 7% (the historical average) then we would become more positive on this stock.
YUM Cash Earnings
As a value investment framework, Ockham Research is similar to a private equity firm in terms of our valuation methods. We are always on the lookout for value in the form of sales and cash numbers. In the case of YUM, Ockham views their current Cash Earnings as below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for YUM, the current level of Cash Earnings compared to its historical levels helps identify where YUM is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 13.12 and a historical low Cash Earnings per share ratio of 8.59, an investor can relate where value becomes optimal.
At its current price of $34.94, the Price to Cash Earnings ratio of 10.46 per share for YUM is relatively attractive. At current profitability levels, a drop in share price would only improve our future expectations. Again, Cash Earnings is an incredibly valuable metric, and management at YUM must continue on its generation to improve our overall outlook for the stock.
YUM Dividends
When determining a company’s future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn’t imperative for YUM to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.
The estimated annual dividend for YUM is $0.76 producing a current dividend yield of 2.18%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from YUM against the historic high and low levels over all available dividend history. Because dividends are a decision made exclusively by management, we view a healthy and rising dividend as a sign of confidence and strength. The highest dividend yield from YUM over previous years was 3.53% while the lowest dividend yield was 0.00%. YUM’s current dividend yield is therefore significantly higher than its median dividend yield historically. In fact, the current yield is 23.51% above the median which weighs very positively on our analysis of YUM.
“…A big drop. Probably a great opportunity. Keep an eye on fluor. >> another drop for sprint. >> it is a 3 1/2 dollar stock. It’s maybe a little overstated. However, they were cut by piper jaffray to underweight from >> YUM BRANDS was down 4%. >> downgraded ubs on valuation and they are rich on valuation but morgan stanley just upgraded these guys a couple days. So the stock keeps having trouble with 36 but I still like >> we’ve got a drop here, literally, for meteors, star gazers, sky gazers, all of them, preparing for the high point of the annual meteor shower which reaches its peak on wednesday. According to nasa you can expect to see dozens of meteors per hour tomorrow in the late which tells me stay inside, folks. Drop for bungee. >> one of the major fertilizer …” – YUM on Fast Money
“…Day’s research calls. The latest upgrades and downgrades. Qlogic upextra graded to center perform because of an expansion in profit margins and stronger demand due to a new intel product. YUM BRANDS downgraded to neutral from buy at ubs. Analysts concerned about sluggish sales that the owner of the fast food chains. And dnagy cut. >> and michelle, it’s such a critical time for investors weigh thought we would bring back in the two davids, david darst, chief investment strategist with morgan stanley, david furle. We left off the conversation a few minutes ago saying we thought the market was going to go down. …” – YUM on Closing Bell
“…The company said the company, quote, turned the ship around. Transports had had a big week last week. Jetblue upgraded to buy. YUM BRANDS, downgraded from ubs neutral to buy. They also maintain their $38 if you see sugar prices lately. Up yesterday on crop worries. Sugar futures in general, 28-year high. Let’s look at hershey, giving a little bit back today. Back to you, mr. Haines. >> the federal reserve kicks off a two-day meeting today. Fomc expected to hold the benchmark rate unchange. Let’s get to our all-star panel for a preview of what we can expect from the fed. Joining us now is the leader of …” – YUM on Squawk On The Street
“…Quickly note, because sprint because you did have wells fargo cutting the wireless market, sprint in particular. And that name is getting hit and sprint is down 3.5%. Last but not least, quickly, just some analyst calls that are worth take ago look at. YUM! BRANDS a downgrade over at ubs saying that sluggish u.S. Sales and want today note that when the s&p 500 dropped bee lo that 1,000 mark we’ve all been waiting and watching, when the s&p moved above 1,000 and when it came down below that, traders cell programs, sell programs as we break below key numbers. So we’ll see whether or not we’ll get the momentum back to the upside and for now, red on the screen in just every sector, back to you. >> dagen: nicole, thank you for concerned americans are speaking their minds at town hall meetings across this country and …” – YUM on Fox Business
“…The darden’s, brinker’s, the cheesecake factories? >> I think they’ve the doen ahead of themselves again. People looking into the back half of the year, maybe pretty I think we’re looking at at best appropriately valued. >> but quick serve, that would be the mcdonald’s, for example, the YUM BRANDS of the world. Do you think they still have room to go? >> I think they do. I think we may see a bit of weakness on the top line coming up in the back half of the year. What i’m looking at is companies have done a great job streamlining their business operations. Cost structures look like they’re in good position. And they get a great tailwind with commodity costs coming the back half of the year. So I think from my perspective valuations look great on that end. >> okay, harry, casual dining space, a lot of those stocks are at 52-week highs. Have they run too far too fast? >> well, we’re contrarian investors and we’re deep value investors, so we like to buy …” – YUM on Closing Bell
“…Ahead for the u.S. Dollar, that would theoretically be good for those multinationals who said in their latest earnings report that that was an impact as to why they perhaps missed on YUM! BRANDS jumps out at me. >> yum, exactly. I’d like to have that kind of exposure. Even walmart has exposure, more than half of their income comes from outside the u.S. …” – YUM on Fast Money
“…Calls. The latest upgrades and morgan stanley cuts its rating on mcdonald’s today to an equal weight from an overweight on the belief that the fast food company has little room left to improve margins. Instead the analyst tells clients he likes YUM BRANDS, the owner of taco bell, pizza hut, and kfc. Upgrades that one to an overweight from an equal weight. And as you can see, that stock is up. Suntrust robinson humphrey downgrades visa to a neutral …” – YUM on Closing Bell
“…control, as profits are beating estimates while revenue continues to be a drag. Just last week we saw that happen with; IBM (IBM), Google (GOOG), YUM! BRANDS (YUM), Gannett (GCI) and Nokia (NOK). All of those firms experienced difficult sales environment in the last quarter, but most were able to improve margins and some even exceeded estimates even as sales fell. Earnings will continue to be in the forefront of the news with 143 of the …” – YUM on The Razor’s Edge
“…Take it away, trace. >> within the next 24 hours, we’ll keep you posted. The loser today YUM BRANDS. They reported a higher second quarter profit but cost cutting all over again. Everyone was hoping china would …” – YUM on Countdown to the Closing Bell
“…sales down 1%-5%. (PR) Intel (INTC): FQ2 EPS of $0.18 beats by $0.10. Revenue of $8B (-15%) vs. $7.3B. Sees Q3 revenue $8.1B-8.9B vs. $7.8B. (PR) YUM! BRANDS (YUM): FQ2 EPS of $0.50 beats by $0.07. Revenue of $2.5B (-7%) in-line. Sees EPS growing 10% for FY10. (PR) Today’s MarketsStocks were broadly up in Asia. European markets and U.S. futures are following suit. In Asia, Nikkei +0.1% to 9,269. Hang Seng +2.1% to 18,259. Shanghai +1.4% to …” – YUM on Seeking Alpha Wall St Breakfast
“…Firearms company shares have more than doubled in since 2005. >>> plus a home run derby stock maybe, and no, it’s not who you >>> and a second look at the trade now that YUM BRANDS is out with earnings. But first a reminder, the intel conference call getting under jim goldman is tweeting away as we speak, but he did speak to …” – YUM on Fast Money
“…“This is an interesting story I was just checking out here. Profit coming in well ahead of estimates, 50 cents per share for YUM BRANDS for their second quarter, as I said, 43 was forecast… The company is looking to continue its growth performance, if you will, and continuing to add stores. We’re going to continue to take a look at the press release on YUM BRANDS. The company is giving back some, it’s up about 20% since their last quarterly report three months ago.” CNBC’s Closing Bell 7/14/2009 Fast-food restaurateur YUM! BRANDS reported second quarter earnings after the closing bell on Tuesday and consensus estimates were calling for earnings of $.43 per share on sales of $2.5 billion. In fact, the company was able to have a 16% earnings per share surprise as they profited $.50 when excluding one time items. …” – YUM on The Razor’s Edge
“…4%. All in all, the company benefited from strong growth in the Chinese market, and company wide cost management improved the company’s margins. YUM! BRANDS has been growing aggressively over the last few years and has focused a lot of that growth in China. Sales grew by 12% in the first quarter and 8% in the second, but many had expected this quarter to be even more challenging for the company’s operations in China, partly because of a …” – YUM on The Razor’s Edge
“…successful growth strategy in China, and this has buoyed this company through what has been a remarkably tumultuous year for the stock market. YUM! BRANDS is actually slightly higher than it was a year ago, putting it way ahead of the pace set by the broad market as the S&P has slumped 26% over the past twelve months. At the current price, we have YUM! BRANDS as Fairly Valued, but it is closer to being overvalued than undervalued. The price had been held up by the projected double digit growth which the company hit this quarter, but if the currency exchange headwinds continue to work against Yum it should cast some doubt on those …” – YUM on The Razor’s Edge
“…will be headed lower over the long term as the U.S. government continues to run the printing presses, then the emerging market growth strategy of YUM! BRANDS could make it more appealing to you. For us, with a multiple approaching 18x, we think YUM is too expensive compared to its competitors. YUM! BRANDS Quarter Hinges on …” – YUM on The Razor’s Edge
“…Company is looking to continue its growth performance, if you will, and continuing to add stores. We’re going to continue to take a look at the press release on YUM BRANDS. The company is giving back some it’s up about 20% since their last quarterly report three months ago. >> thanks very much, matt. I’m getting more headlines on intel because the second quarter …” – YUM on Closing Bell
“…>> thanks very much, dan morgan. Appreciate your time. Aside from intel, we have a host of other numbers. After the bell, matt nesto is at the nerve center right new at headquarters with more on YUM BRANDS. >> this is an interesting story I was just checking out here. Profit coming in well ahead of estimates, 50 cents per share for YUM BRANDS for their second as I said, 43 was forecast. That was going to represent a 4% so the company coming in actually with a 10% increase, as well. If you take a look at some of the other issues that they’re …” – YUM on Closing Bell
“…That appears to be the case. That’s good news. >> intel makes chips for p.C.’s and hand helds. What about YUM BRANDS? How do you take that news? >> well, I gather, from what you said that the top line was many of the earning’s beat so …” – YUM on Bulls & Bears
“…Numbers, but expectations 2.5 billion, same store sales down 1% at yum. Top line missing, bottom line beat for YUM BRANDS. >> okay, robert look into the details more closely. Intel, where we are focused right now, fritz, when you look …” – YUM on Bulls & Bears
“…Tell us about yum, robert. >> looks like 50-cents there, a beat by seven cents. Expectations 43-cents for YUM BRANDS, the parent company of kfc and taco bell. Looking at revenue numbers, 2.48 billion there. …” – YUM on Bulls & Bears
“…>> bottom line, sandra smith, what you got? >> we are talking tacos, pizza hut, taco bell. YUM BRANDS reporting after the bell today. China the key factor in the earning’s report today. Fast food operator looking to show the first quarterly sales …” – YUM on Countdown to the Closing Bell
“…>> sandra, what are you >> optimism over goldman sachs, j&j. After the bell, we have intel and we’ll speak to somebody about that. Also YUM BRANDS. This is the owner of the restaurant chain. Abbott lab report before the bell tomorrow morning. Key earnings coming up and the stocks reporting earnings soon are higher. A lot of optimism. …” – YUM on Countdown to the Closing Bell
“…So I think it’s fully valued and I would look at some of the the other names. Charles: you know, it’s interesting you say that because there’s been a lot of upgrades in the semis. I haven’t seen any upgrades on let’s shift over to YUM! BRANDS YUM! BRANDS in march beat the street by 20%. What are you looking for there? >> I think they will continue to do well this year. This is actually going to be the toughest quarter, though of the …” – YUM on Money For Breakfast
“…Only major company. Also on the agenda is j&j. This afternoon after the close, we get another dow component, intel, along with YUM BRANDS, which got a boost. Remember when magic johnson talked about jacko? …” – YUM on Squawk Box
“…I mean, these aren’t like just shots to the upside. These are recoveries from the very harsh selloff of february and march. And that’s why I think YUM BRANDS in particular does look like the recovery story will continue to play out. >> then we’ve got google. This is going to be great fun to it’s the perfect excuse to play with it because there’s …” – YUM on Squawk Box
“…Screeching halt and investors wondered, where have all of the green shoots gone, our traders try to keep you quicker than the >> good stock of the day is yum, YUM BRANDS, the owner of kfc and pizza hut. Here’s why we like YUM BRANDS. Play the growth of the emergeing the middle class around the world. >> the chairwoman putting her money where her mouth is literally. Yum jumped 7%. >> we liked the engine on the …” – YUM on Fast Money
“…>> yeah, bluegrass, what’s up? >> caller: am I diversified is what i’m wondering about. >> let’s take it direct head-on. What you got >> caller: YUM! BRANDS, honeywell, big lotts and bb and >> let me get this right. No, you have hp, that’s — you …” – YUM on Mad Money
“…Somehow cancel those orders from communist china? What about the fantastic numbers from general mills? Or how about terrific business is at the YUM BRANDS? Taco bell, kfc, pizza hut, long john silvers for all you home gamers and seafood lovers. Both companies are doing incredibly well. Is that somehow neutralized …” – YUM on Mad Money
“…Group of people basically put on hold over the last couple of months and can they really recuperate without us in their >> yeah, absolutely. And think about this. In china, for example, we know that YUM BRANDS, wendy’s, kfc, et cetera, et cetera — excuse me, taco bell. They’re the ones that tell me that that’s the country where they have the highest concentration of college graduates running their restaurants, whereas in other …” – YUM on Closing Bell
“…To $73.10 per square foot.2 and the overall manhattan vacancy rate rising to more than 13%. >>> and mcdonald’s is out, and taco bell is in with the nba. The YUM BRANDS fast food chain reaching a four-year deal to become the nba’s fast food partner, which includes ads on abc, tnt, espn, as well as an nba-themed promotion at taco …” – YUM on Closing Bell
“…500 stocks to the down side. With a few names in green. There are winners for the general motors and YUM BRANDS making news. General motors talking positive and giving a good outlook. And YUM BRANDS is the owner ofca toe bell and kfc. They’ve done well getting a buy rating from goldman these are the names that held on throughout the week. Some down arrows here. Sprint has been a big laggard …” – YUM on Fox Business
“…Of his kraft shares, stocks up more than 5% after announcing plans to expand factories in russia, also the whole consumer group was higher. >>> time for the "final trade." >> YUM! BRANDS. >> oil rose, take a look at >> elan, where there’s smoke, >> i’m melissa lee. You tomorrow back at 5:00 for have a great night. …” – YUM on Fast Money
“…Founding father. >>> but, first, let’s get to pete. He’s got the stock of the day. Pitie, reveal what stock you’re >> well, you got to like — we are talking all the time about mcdonald’s and we’ve got this focus on YUM! BRANDS and it kind of brings you a little bit towards the problem in america today, which is obesity. That brings you to diabetes, multibillion dollar area right …” – YUM on Fast Money
“…And raising its forecast for the we had a number of positive data points here including young brands, the price target getting raised there. Optimism about the consumer, although pessimism about the employment picture at the same >> well, the YUM! BRANDS story, we talked about it 100 times it’s the china story and we’ll talk about it again, YUM! BRANDS can continue to do well, you look at the chart in march when the stock was trading at $23. It had a lovely pattern. >> lovely. >> going up more and corrected a it’s a lovely looking chart. >> delightful. >> the $4.25 we made a week ago. I like YUM! BRANDS. It could trade higher. >> the problem with yum! They are very much like mcdonald’s, they’re doing everything right, but they are just kind of churning like the churning in a tight range. If you look at the consumer and …” – YUM on Fast Money
“…The analyst there is raising his price target on the stock to 40. That’s up from 36. Citing the company’s strong growth and improving u.S. Sales and profit margins. YUM BRANDS tonight up 5%. Jpmorgan upgraded marvell entertainment to an overweight from a neutral. Hiked its price target on the stock as well to 42 from 27. The analyst tells clients the company will be able to continue …” – YUM on Closing Bell
“…General mills expect the rate of cost of inflation on input goods to moderate and that actually sent the whole consumer staple and kraft benefitted and was our big dow leader today. YUM! BRANDS actually also benefitting from the same comments, our fox 50 leader, but also a nice bump from goldman sachs, upgrade. Analyst upgraded it to buy from …” – YUM on Countdown to the Closing Bell
“…Sector, such as marriott and also, starwood. This as barclays was satisfying, a hotel and lodging group is going to lag the recovery by at least six months so we are going to see some names to the down side and the pressure is on that other than that, YUM! BRANDS a buy rating at goldman sachs, up nearly 6%. Back to you. >> dagen: thank you so much. Nicole. Our next guest says that we’re still moving toward a recovery. But inflation is on the horizon. …” – YUM on Fox Business
“…The troops in afghanistan. Give this name certainly a big also, I don’t know how many of you are fans are taco bell and I can tell you at least goldman sachs is this morning, upping YUM! BRANDS to a buy rating from a neutral saying that they expect profit growth and their international businesses and you could see that YUM! BRANDS as it’s a whole casual signing group, except for ruby tuesday, all the names with up arrows across the screen and other names worth watching, barclays …” – YUM on Fox Business
“…Take a look at some of the stocks in the news. YUM! BRANDS, as you can see, up 4% trading higher after goldman sachs upgrade the stock from neutral to buy. Shares of starwood hotels, bearish on the hotel industry. …” – YUM on The Opening Bell on Fox Business
“…Drum roll. We need a drum roll here. Pete, what is the stock of the day. >> you have to be impressed with the way mcdonalds continues to you look at YUM BRANDS. You look at mcdonalds. Two companies that are building off the same model, which is european growth, chinese growth and that’s exactly what they’re …” – YUM on Fast Money