YUM BRANDS INC's gross profit margin for the second quarter of its fiscal year 2015 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, although the growth in net income underperformed the average competitor within the industry, the revenue growth did not. YUM BRANDS INC has very weak liquidity. Currently, the Quick Ratio is 0.37 which clearly shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.
At the same time, stockholders' equity ("net worth") has significantly decreased by 30.69% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.
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|Income Statement||Q2 FY15||Q2 FY14|
|Net Sales ($mil)||3105.0||3204.0|
|Net Income ($mil)||235.0||334.0|
|Balance Sheet||Q2 FY15||Q2 FY14|
|Cash & Equiv. ($mil)||636.0||831.0|
|Total Assets ($mil)||8294.0||8810.0|
|Total Debt ($mil)||3399.0||3165.0|
|Profitability||Q2 FY15||Q2 FY14|
|Gross Profit Margin||33.62||32.9|
|Return on Assets||11.03||13.68|
|Return on Equity||58.31||53.26|
|Debt||Q2 FY15||Q2 FY14|
|Share Data||Q2 FY15||Q2 FY14|
|Shares outstanding (mil)||432.0||440.0|
|Div / share||0.41||0.37|
|Book value / share||3.63||5.15|
|Institutional Own %||n/a||n/a|
|Avg Daily Volume||3530352.0||4135197.0|
BUY. This stock's P/E ratio indicates a premium compared to an average of 32.28 for the Hotels, Restaurants & Leisure industry and a significant premium compared to the S&P 500 average of 20.51. For additional comparison, its price-to-book ratio of 22.53 indicates a significant premium versus the S&P 500 average of 2.73 and a significant premium versus the industry average of 9.40. The current price-to-sales ratio is well above the S&P 500 average, but below the industry average. After reviewing these and other key valuation criteria, YUM BRANDS INC proves to trade at a premium to investment alternatives within the industry.
|YUM 40.31||Peers 32.28||YUM 18.39||Peers 17.46|
Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.
YUM is trading at a premium to its peers.
Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.
YUM is trading at a valuation on par to its peers.
|YUM 20.20||Peers 27.35||YUM 0.78||Peers 1.01|
Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.
YUM is trading at a discount to its peers.
Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.
YUM trades at a discount to its peers.
|YUM 22.53||Peers 9.40||YUM -22.82||Peers 157.17|
Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.
YUM is trading at a significant premium to its peers.
Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.
However, YUM is expected to significantly trail its peers on the basis of its earnings growth rate.
|YUM 2.70||Peers 2.96||YUM -3.65||Peers 6.66|
Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.
YUM is trading at a valuation on par with its industry on this measurement.
Lower. A sales growth rate that trails the industry implies that a company is losing market share.
YUM significantly trails its peers on the basis of sales growth
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