Yum! Brands, Inc. (YUM) Shares Gap Up on Better-Than-Expected Earnings

Yum! Brands, Inc. (NYSE:YUM)’s share price gapped up before the market opened on Friday after the company announced better than expected quarterly earnings. The stock had previously closed at $69.36, but opened at $74.31. Yum! Brands shares last traded at $79.05, with a volume of 1516554 shares.

The restaurant operator reported $0.68 EPS for the quarter, beating the Zacks’ consensus estimate of $0.67 by $0.01. The business had revenue of $1.44 billion for the quarter, compared to analysts’ expectations of $1.39 billion. Yum! Brands had a negative return on equity of 17.19% and a net margin of 18.51%. The business’s quarterly revenue was down 5.4% on a year-over-year basis. During the same period last year, the firm earned $1.09 earnings per share.

The firm also recently declared a quarterly dividend, which will be paid on Friday, December 8th. Shareholders of record on Wednesday, November 15th will be issued a dividend of $0.30 per share. The ex-dividend date is Tuesday, November 14th. This represents a $1.20 dividend on an annualized basis and a yield of 1.52%. Yum! Brands’s dividend payout ratio is presently 37.04%.

YUM has been the topic of a number of recent analyst reports. Zacks Investment Research raised Yum! Brands from a “hold” rating to a “buy” rating and set a $85.00 price target on the stock in a report on Tuesday, August 1st. Stifel Nicolaus initiated coverage on Yum! Brands in a report on Monday, October 2nd. They set a “buy” rating and a $88.00 price target on the stock. Royal Bank Of Canada reissued an “outperform” rating and set a $83.00 price target on shares of Yum! Brands in a report on Monday, September 11th. Barclays PLC raised their price target on Yum! Brands from $74.00 to $78.00 and gave the company an “equal weight” rating in a report on Wednesday, October 18th. Finally, UBS AG reissued a “positive” rating and set a $89.00 price target (up from $83.00) on shares of Yum! Brands in a report on Friday. Twelve analysts have rated the stock with a hold rating, twelve have assigned a buy rating and one has given a strong buy rating to the stock. The stock currently has an average rating of “Buy” and a consensus price target of $80.95.

In other Yum! Brands news, CFO David W. Gibbs sold 8,336 shares of the business’s stock in a transaction that occurred on Wednesday, August 9th. The stock was sold at an average price of $74.00, for a total transaction of $616,864.00. Following the completion of the transaction, the chief financial officer now owns 39,664 shares in the company, valued at $2,935,136. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. 7.38% of the stock is owned by insiders.

Several large investors have recently made changes to their positions in the business. Vanguard Group Inc. boosted its position in shares of Yum! Brands by 3.3% during the second quarter. Vanguard Group Inc. now owns 22,604,873 shares of the restaurant operator’s stock valued at $1,667,335,000 after buying an additional 711,910 shares during the period. Magellan Asset Management Ltd boosted its holdings in shares of Yum! Brands by 2.0% in the second quarter. Magellan Asset Management Ltd now owns 15,446,852 shares of the restaurant operator’s stock valued at $1,139,360,000 after purchasing an additional 308,387 shares during the period. FMR LLC boosted its holdings in shares of Yum! Brands by 9.2% in the second quarter. FMR LLC now owns 3,011,009 shares of the restaurant operator’s stock valued at $222,092,000 after purchasing an additional 254,573 shares during the period. Ameriprise Financial Inc. boosted its holdings in shares of Yum! Brands by 5.9% in the second quarter. Ameriprise Financial Inc. now owns 2,405,149 shares of the restaurant operator’s stock valued at $177,414,000 after purchasing an additional 133,158 shares during the period. Finally, Coronation Fund Managers Ltd. boosted its holdings in shares of Yum! Brands by 8.5% in the second quarter. Coronation Fund Managers Ltd. now owns 2,169,235 shares of the restaurant operator’s stock valued at $160,003,000 after purchasing an additional 170,386 shares during the period. Institutional investors and hedge funds own 72.02% of the company’s stock.

The company has a current ratio of 1.42, a quick ratio of 1.19 and a debt-to-equity ratio of -1.55. The stock has a market capitalization of $27,206.04, a price-to-earnings ratio of 28.18, a PEG ratio of 2.40 and a beta of 0.86.

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About Yum! Brands

YUM! Brands, Inc is engaged in restaurant business. As of December 31, 2016, the Company operated or franchised over 43,500 restaurants in more than 135 countries and territories operating under the KFC, Pizza Hut or Taco Bell (collectively the Concepts) brands. The Company operates through three segments: The KFC Division, which includes the operations of the KFC concept around the world; The Pizza Hut Division, which includes the operations of the Pizza Hut concept around the world, and The Taco Bell Division, which includes the operations of the Taco Bell concept around the world.

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