Yum Brands Inc

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YUM : NYSE : Services
$66.15 up 0.43 | 0.65%
Today's Range: 65.72 - 66.49
Avg. Daily Volume: 2695100.0
04/25/17 - 2:43 PM ET

Financial Analysis

YUM BRANDS INC's gross profit margin for the third quarter of its fiscal year 2016 has increased when compared to the same period a year ago. Even though sales decreased, the net income has increased. YUM BRANDS INC has average liquidity. Currently, the Quick Ratio is 1.45 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

At the same time, stockholders' equity ("net worth") has significantly decreased by 203.89% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)3316.03427.0
EBITDA ($mil)825.0802.0
EBIT ($mil)650.0623.0
Net Income ($mil)622.0421.0

Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)2885.0861.0
Total Assets ($mil)10432.08306.0
Total Debt ($mil)9167.03217.0
Equity ($mil)-1896.01825.0

Profitability Q3 FY16 Q3 FY15
Gross Profit Margin36.7934.34
EBITDA Margin24.8723.4
Operating Margin19.618.18
Sales Turnover1.241.58
Return on Assets15.5911.22
Return on Equity0.051.06
Debt Q3 FY16 Q3 FY15
Current Ratio1.740.73
Interest Expense87.032.0
Interest Coverage7.4719.47

Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)376.0431.0
Div / share0.460.41
Book value / share-5.044.23
Institutional Own % n/a n/a
Avg Daily Volume2681793.03621026.0


HOLD. The current P/E ratio indicates a significant discount compared to an average of 37.52 for the Hotels, Restaurants & Leisure industry and a discount compared to the S&P 500 average of 25.60. Normally, for additional comaprison, we would look at the price-to-book ratio; however, this company's price-to-book ratio is negative making the value useless for comparisons. The price-to-sales ratio is similar to the S&P 500 average, but it is significantly below the industry average, indicating a discount. After reviewing these and other key valuation criteria, YUM BRANDS INC proves to trade at a discount to investment alternatives within the industry.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
YUM 16.71 Peers 37.52   YUM 13.19 Peers 16.80

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.


Discount. 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 discount to its peers.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
YUM 23.84 Peers 23.44   YUM NM Peers 2.99

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

YUM is trading at a premium to 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.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
YUM NM Peers 7.25   YUM 88.03 Peers 98.26

Neutral. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

YUM's P/B is negative making this valuation measure meaningless.


Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, YUM is expected to trail its peers on the basis of its earnings growth rate.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
YUM 1.91 Peers 2.87   YUM -1.96 Peers 5.29

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 significant 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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