Yum Brands Inc

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YUM : NYSE : Services
$90.04 up 0.32 | 0.36%
Today's Range: 89.62 - 89.99
Avg. Daily Volume: 3,022,200
07/28/16 - 11:47 AM ET

Financial Analysis

YUM BRANDS INC's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales decreased, the net income has increased. YUM BRANDS INC has weak liquidity. Currently, the Quick Ratio is 0.52 which shows a lack of 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 124.79% 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.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)3008.03105.0
EBITDA ($mil)606.0628.0
EBIT ($mil)428.0441.0
Net Income ($mil)339.0235.0

Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)795.0636.0
Total Assets ($mil)8184.08294.0
Total Debt ($mil)5363.03399.0
Equity ($mil)-389.01569.0

Profitability Q2 FY16 Q2 FY15
Gross Profit Margin34.5733.62
EBITDA Margin20.1420.22
Operating Margin14.2314.2
Sales Turnover1.591.58
Return on Assets17.4211.03
Return on Equity0.058.31
Debt Q2 FY16 Q2 FY15
Current Ratio0.820.64
Interest Expense40.033.0
Interest Coverage10.713.36

Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)399.0432.0
Div / share0.460.41
Book value / share-0.973.63
Institutional Own % n/a n/a
Avg Daily Volume2938425.04023187.0


HOLD. YUM BRANDS INC's P/E ratio indicates a discount compared to an average of 28.27 for the Hotels, Restaurants & Leisure industry and a value on par with the S&P 500 average of 25.05. 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 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 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 26.48 Peers 28.27   YUM 17.08 Peers 13.95

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

YUM is trading at a valuation on par with 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 premium to its peers.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
YUM 20.93 Peers 24.99   YUM 1.00 Peers 2.68

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.


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 significant discount to its peers.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
YUM NM Peers 11.48   YUM 63.54 Peers 18.32

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.


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

YUM is expected to have an earnings growth rate that significantly exceeds its peers.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
YUM 2.70 Peers 2.92   YUM -0.56 Peers 8.46

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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