Stock of the Day

December 30, 2019

Yum! Brands (YUM)

$144.24
+$1.36 (+1.0%)
Market Cap: $40.10B

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 current stock price is around $143.82, which reflects a stable market position and potential for growth.
  • Yum! Brands, Inc. reported a year-over-year revenue increase of 11.8%, indicating strong business performance and demand for its products.
  • The company has a market capitalization of approximately $39.98 billion, suggesting it is a significant player in the restaurant industry.
  • Institutional investors own about 82.37% of the company's stock, which often indicates confidence in the company's future prospects.
  • Yum! Brands, Inc. has consistently outperformed earnings expectations, recently reporting earnings per share of $1.30, slightly above the consensus estimate.

Yum! Brands Bear Case

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

  • The company has a negative return on equity of 20.33%, which may raise concerns about its profitability and efficiency in generating returns for shareholders.
  • Yum! Brands, Inc. reported a net margin of 19.68%, which, while positive, may indicate that there is room for improvement in cost management.
  • The stock has experienced fluctuations, with a 52-week high of $163.30 and a low of $122.13, suggesting volatility that could deter risk-averse investors.
  • Recent trading volumes have shown variability, with the latest trading volume at 3,184,350 shares, which could indicate uncertainty in market sentiment.
  • Analysts predict a P/E ratio of 27.55, which may be considered high, suggesting that the stock could be overvalued compared to its earnings potential.
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