Over the last five years YUM has delivered 22% per year. This has handily beat the returns of the S&P 500 during that same period of time.
Over the past three years it has delivered an average of 14.5% per year. This barely beats the average market return of 13.5% per year. This stock has become more and more of an average stock recently as it gets bigger in size.
When I compare the long-term and intermediate-term returns of YUM and compare it against the other 3,569 stocks that I track, it gets a performance grade of B+.
Here's my biggest problem with the stock lately, however. YUM has severely underperformed the market over the last 12 months. Look at the numbers for yourself.YUM's momentum has been terrible. It has badly unperformed the market over the last year. In fact, the stock is down 2.3% over the last 12 months while the market is up 18.9%. So it gets a momentum grade of D-. Valuation: Maybe a very attractive valuation on the shares can save the day? Data from Best Stocks Now App The shares are currently trading at 18.5 times forward earnings with an expected five-year annual growth rate of 11%. The shares are trading at a fairly large premium to its growth rate. This shows up in the PEG ratio of 1.66. When I extrapolate out the current earnings estimates over the next five years and apply a reasonable multiple, I do come up with a fairly attractive five-year target price -- but I require performance and value. YUM falls flat on its performance. Stock Chart: Lastly, as a professional money manager, I require a vibrant and healthy stock chart. Courtesy of StockCharts.com This is about as dull of a technical pattern as you can find in this current BULL MARKET. Why would I want to have my money tied up in this dud when large-cap stock like EOG Resources (EOG), Netflix (NFLX), Priceline.com (PCLN), etc. are breaking out all over the place? The bottom line is this: YUM! Brands was dead money before it reported earnings. Now it is really dead money.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV