Yum! Brands Inc.

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YUM : NYSE : Consumer Services
$78.31 up 0.5 | 0.64%
Today's Range: 77.9 - 78.83
Avg. Daily Volume: 1831900.0
02/22/18 - 3:59 PM ET

Financial Analysis


YUM BRANDS INC's gross profit margin for the fourth quarter of its fiscal year 2017 has significantly 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 1.27 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.

During the same period, stockholders' equity ("net worth") has decreased by 11.98% 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 Q4 FY17 Q4 FY16
Net Sales ($mil)1577.01886.0
EBITDA ($mil)1299.0686.0
EBIT ($mil)1241.0601.0
Net Income ($mil)436.0303.0


Balance Sheet Q4 FY17 Q4 FY16
Cash & Equiv. ($mil)1522.0759.0
Total Assets ($mil)5311.05478.0
Total Debt ($mil)9804.09127.0
Equity ($mil)-6334.0-5656.0


Profitability Q4 FY17 Q4 FY16
Gross Profit Margin82.3750.74
EBITDA Margin82.3736.37
Operating Margin78.6931.87
Sales Turnover1.111.16
Return on Assets25.2329.99
Return on Equity0.00.0
Debt Q4 FY17 Q4 FY16
Current Ratio1.661.08
Debt/Capital2.832.63
Interest Expense118.0114.0
Interest Coverage10.525.27


Share Data Q4 FY17 Q4 FY16
Shares outstanding (mil)332.0355.0
Div / share0.30.51
EPS1.260.83
Book value / share-19.08-15.93
Institutional Own % n/a n/a
Avg Daily Volume1887638.01855748.0

Valuation


HOLD. This stock's P/E ratio indicates a discount compared to an average of 27.27 for the Hotels, Restaurants & Leisure industry and a discount compared to the S&P 500 average of 25.51. 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 well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, YUM BRANDS INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
YUM 20.84 Peers 27.27   YUM 25.45 Peers 15.85

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

YUM is trading at a discount to its peers.

 

Premium. 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 significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
YUM 20.92 Peers 24.18   YUM NM Peers 0.85

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.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
YUM NM Peers 17.07   YUM 48.04 Peers 258.59

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 significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
YUM 4.46 Peers 3.55   YUM -7.53 Peers 10.44

Premium. 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 premium to its industry.

 

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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