Yum! Brands, Inc.
Yum! Brands, Inc. Fundamental Analysis
Yum! Brands, Inc. (YUM) shows moderate financial fundamentals with a PE ratio of 28.56, profit margin of 18.98%, and ROE of -20.57%. The company generates $8.2B in annual revenue with moderate year-over-year growth of 6.68%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 52.2/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze YUM's fundamental strength across five key dimensions:
Efficiency Score
ExcellentYUM demonstrates superior asset utilization.
Valuation Score
WeakYUM trades at a premium to fair value.
Growth Score
ModerateYUM shows steady but slowing expansion.
Financial Health Score
ExcellentYUM maintains a strong and stable balance sheet.
Profitability Score
ModerateYUM maintains healthy but balanced margins.
Key Financial Metrics
Is YUM Expensive or Cheap?
P/E Ratio
YUM trades at 28.56 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, YUM's PEG of 4.86 indicates potential overvaluation.
Price to Book
The market values Yum! Brands, Inc. at -6.08 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 11.89 times EBITDA. This signals the market has high growth expectations.
How Well Does YUM Make Money?
Net Profit Margin
For every $100 in sales, Yum! Brands, Inc. keeps $18.98 as profit after all expenses.
Operating Margin
Core operations generate 31.34 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-20.57 in profit for every $100 of shareholder equity.
ROA
Yum! Brands, Inc. generates $19.02 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Yum! Brands, Inc. produces operating cash flow of $2.00B, showing steady but balanced cash generation.
Free Cash Flow
Yum! Brands, Inc. generates strong free cash flow of $1.63B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $5.90 in free cash annually.
FCF Yield
YUM converts 3.70% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
28.56
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
4.86
vs 25 benchmark
P/B Ratio
Price to book value ratio
-6.08
vs 25 benchmark
P/S Ratio
Price to sales ratio
5.39
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-1.63
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.35
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.21
vs 25 benchmark
ROA
Return on assets percentage
0.19
vs 25 benchmark
ROCE
Return on capital employed
0.39
vs 25 benchmark
How YUM Stacks Against Its Sector Peers
| Metric | YUM Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 28.56 | 24.18 | Worse (Expensive) |
| ROE | -20.57% | 1174.00% | Weak |
| Net Margin | 18.98% | 783.00% | Weak |
| Debt/Equity | -1.63 | 0.79 | Strong (Low Leverage) |
| Current Ratio | 1.35 | 2.59 | Neutral |
| ROA | 19.02% | -8308.00% (disorted) | Strong |
YUM outperforms its industry in 2 out of 6 key metrics, particularly excelling in ROA, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Yum! Brands, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
46.35%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
24.61%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
39.37%
Industry Style: Cyclical, Growth, Discretionary
High Growth