-0.13 | -0.18%
YUM BRANDS INC's gross profit margin for the first quarter of its fiscal year 2013 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. YUM BRANDS INC has weak liquidity. Currently, the Quick Ratio is 0.54 which 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.
During the same period, stockholders' equity ("net worth") has increased by 7.04% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.
| Income Statement | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Net Sales ($mil) | 2535.0 | 2743.0 |
| EBITDA ($mil) | 592.0 | 667.0 |
| EBIT ($mil) | 462.0 | 540.0 |
| Net Income ($mil) | 337.0 | 458.0 |
| Balance Sheet | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Cash & Equiv. ($mil) | 762.0 | 1099.0 |
| Total Assets ($mil) | 8945.0 | 9343.0 |
| Total Debt ($mil) | 2945.0 | 3325.0 |
| Equity ($mil) | 2293.0 | 2142.0 |
| Profitability | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Gross Profit Margin | 35.46 | 35.22 |
| EBITDA Margin | 23.35 | 24.31 |
| Operating Margin | 18.22 | 19.69 |
| Sales Turnover | 1.5 | 1.39 |
| Return on Assets | 16.5 | 16.19 |
| Return on Equity | 64.36 | 70.63 |
| Debt | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Current Ratio | 0.91 | 1.01 |
| Debt/Capital | 0.56 | 0.61 |
| Interest Expense | 33.0 | 40.0 |
| Interest Coverage | 14.0 | 13.5 |
| Share Data | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Shares outstanding (mil) | 450.0 | 460.0 |
| Div / share | 0.34 | 0.29 |
| EPS | 0.72 | 0.96 |
| Book value / share | 5.1 | 4.66 |
| Institutional Own % | n/a | n/a |
| Avg Daily Volume | 3932143.0 | 5488289.0 |
BUY. The current P/E ratio indicates a discount compared to an average of 29.81 for the Hotels, Restaurants & Leisure industry and a premium compared to the S&P 500 average of 19.08. For additional comparison, its price-to-book ratio of 13.66 indicates a significant premium versus the S&P 500 average of 2.44 and a significant premium versus the industry average of 7.92. The current price-to-sales ratio is well above the S&P 500 average, but below the industry average. The valuation analysis reveals that, YUM BRANDS INC seems to be trading at a discount to investment alternatives within the industry.
| Price/Earnings |
|
Price/Cash Flow |
| |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| YUM 22.25 | Peers 29.81 | YUM 14.14 | Peers 13.90 | |||||||||||||||||||||
|
Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations. YUM is trading at a significant discount 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. |
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| Price/Projected Earnings |
|
Price to Earnings/Growth |
|
|||||||||||||||||||||
| YUM 18.74 | Peers 22.31 | YUM NM | Peers 1.62 | |||||||||||||||||||||
|
Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations. YUM is trading at a valuation on par with its peers. |
Neutral. 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's negative PEG ratio makes this valuation measure meaningless. |
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| Price/Book |
|
Earnings Growth |
|
|||||||||||||||||||||
| YUM 13.66 | Peers 7.92 | YUM -0.95 | Peers 62.38 | |||||||||||||||||||||
|
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. |
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| Price/Sales |
|
Sales Growth |
|
|||||||||||||||||||||
| YUM 2.33 | Peers 2.82 | YUM 3.71 | Peers 7.25 | |||||||||||||||||||||
|
Discount. 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 discount to 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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