North Star Asset Management Inc. Purchases New Holdings in Yum! Brands, Inc. $YUM

Key Points

• North Star Asset Management initiated a new Yum! Brands position by purchasing 7,798 shares valued at approximately $1.25 million. Institutional investors collectively own 82.37% of the company.
• Yum! Brands reported quarterly earnings of $1.62 per share, beating estimates by $0.04, while revenue rose 12.2% year over year to $2.17 billion. Shares recently traded near $154, and analysts maintain a “Moderate Buy” consensus with a $174.65 target price.
• The company declared a quarterly dividend of $0.75 per share, representing a 1.9% yield, and authorized a $4 billion stock-repurchase program covering up to 9.4% of outstanding shares.

North Star Asset Management Inc. purchased a new position in shares of Yum! Brands, Inc. (NYSE:YUM - Free Report) during the second quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The firm purchased 7,798 shares of the restaurant operator's stock, valued at approximately $1,247,000.

Several other hedge funds and other institutional investors have also bought and sold shares of the business. Harrell Investment Partners LLC raised its stake in shares of Yum! Brands by 1.5% during the 2nd quarter. Harrell Investment Partners LLC now owns 4,235 shares of the restaurant operator's stock worth $677,000 after purchasing an additional 62 shares during the period. Econ Financial Services Corp boosted its holdings in shares of Yum! Brands by 0.4% in the 1st quarter. Econ Financial Services Corp now owns 15,536 shares of the restaurant operator's stock worth $2,416,000 after buying an additional 63 shares during the last quarter. Magnolia Capital Advisors LLC grew its position in Yum! Brands by 2.0% during the fourth quarter. Magnolia Capital Advisors LLC now owns 3,292 shares of the restaurant operator's stock valued at $498,000 after buying an additional 63 shares during the period. Essex Financial Services Inc. increased its holdings in Yum! Brands by 1.0% during the fourth quarter. Essex Financial Services Inc. now owns 6,667 shares of the restaurant operator's stock worth $1,009,000 after buying an additional 66 shares during the last quarter. Finally, Hilltop Holdings Inc. increased its holdings in Yum! Brands by 2.8% during the fourth quarter. Hilltop Holdings Inc. now owns 2,525 shares of the restaurant operator's stock worth $382,000 after buying an additional 68 shares during the last quarter. Hedge funds and other institutional investors own 82.37% of the company's stock.

Yum! Brands Trading Up 2.2%

Shares of YUM stock opened at $154.08 on Friday. The firm's 50 day moving average is $153.48 and its 200 day moving average is $155.81. The stock has a market capitalization of $42.05 billion, a P/E ratio of 19.38, a PEG ratio of 2.45 and a beta of 0.55. Yum! Brands, Inc. has a 12 month low of $137.33 and a 12 month high of $170.14.

Yum! Brands (NYSE:YUM - Get Free Report) last released its quarterly earnings data on Thursday, July 30th. The restaurant operator reported $1.62 earnings per share for the quarter, beating analysts' consensus estimates of $1.58 by $0.04. Yum! Brands had a net margin of 25.42% and a negative return on equity of 24.57%. The business had revenue of $2.17 billion during the quarter, compared to analyst estimates of $2.18 billion. During the same period in the previous year, the business earned $1.44 EPS. Yum! Brands's revenue was up 12.2% compared to the same quarter last year. On average, equities analysts predict that Yum! Brands, Inc. will post 6.42 EPS for the current year.

Yum! Brands Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Friday, September 18th. Stockholders of record on Wednesday, September 9th will be given a $0.75 dividend. The ex-dividend date is Wednesday, September 9th. This represents a $3.00 annualized dividend and a dividend yield of 1.9%. Yum! Brands's payout ratio is 37.74%.

Yum! Brands declared that its Board of Directors has approved a stock repurchase plan on Tuesday, June 16th that permits the company to buyback $4.00 billion in shares. This buyback authorization permits the restaurant operator to reacquire up to 9.4% of its shares through open market purchases. Shares buyback plans are usually an indication that the company's management believes its shares are undervalued.

Analyst Upgrades and Downgrades

A number of research analysts have weighed in on YUM shares. BMO Capital Markets reiterated a "market perform" rating and issued a $168.00 target price on shares of Yum! Brands in a research note on Monday, May 4th. Argus lowered their price target on shares of Yum! Brands from $185.00 to $180.00 and set a "buy" rating on the stock in a report on Monday, August 17th. TD Cowen reiterated a "buy" rating and issued a $180.00 price objective on shares of Yum! Brands in a research note on Tuesday, June 16th. Citigroup increased their price objective on Yum! Brands from $175.00 to $178.00 and gave the company a "neutral" rating in a report on Sunday, July 12th. Finally, JPMorgan Chase & Co. decreased their target price on Yum! Brands from $170.00 to $160.00 and set an "overweight" rating for the company in a research report on Tuesday, August 4th. One research analyst has rated the stock with a Strong Buy rating, twelve have assigned a Buy rating, seven have assigned a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, Yum! Brands has an average rating of "Moderate Buy" and a consensus price target of $174.65.

Insider Buying and Selling

In related news, VP David Eric Russell sold 7,961 shares of the business's stock in a transaction on Monday, August 3rd. The stock was sold at an average price of $153.15, for a total transaction of $1,219,227.15. Following the sale, the vice president directly owned 11,960 shares in the company, valued at approximately $1,831,674. The trade was a 39.96% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Aaron Powell sold 6,001 shares of the stock in a transaction dated Wednesday, July 1st. The stock was sold at an average price of $160.42, for a total value of $962,680.42. Following the sale, the chief executive officer directly owned 12,003 shares in the company, valued at $1,925,521.26. This trade represents a 33.33% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 19,043 shares of company stock valued at $2,978,180 in the last 90 days. Corporate insiders own 0.14% of the company's stock.

Yum! Brands Company Profile

Yum! Brands, Inc NYSE: YUM is a global quick-service restaurant company that develops, operates and franchises a portfolio of well-known restaurant brands. The company's principal brands are KFC, Pizza Hut and Taco Bell, each focused on distinct product categories—KFC on fried chicken and related menu items, Pizza Hut on pizza and complementary offerings, and Taco Bell on Mexican-inspired quick-service food. Yum! is headquartered in Louisville, Kentucky and was formed as Tricon Global Restaurants in 1997 when PepsiCo spun off its restaurant businesses, later adopting the Yum! Brands name.

The company's operating model centers on brand development, system growth and franchising; a large portion of its restaurants are operated by independent franchisees, and Yum! generates revenue through franchise royalties and fees in addition to sales from company-operated locations.

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