Yum! Brands (NYSE:YUM) Hits New 12-Month High - What's Next?

Key Points

• Yum! Brands hit a new 52-week high, trading as high as $169.72 after closing at $165.99 the prior session, reflecting strong recent momentum in the stock.
• Recent earnings were better than expected, with Q1 EPS of $1.50 versus estimates of $1.39 and revenue of $2.06 billion, up 15.2% year over year.
• The company boosted shareholder returns by paying a $0.75 quarterly dividend and authorizing a $4 billion stock buyback, while analysts remain broadly positive with a consensus target price of $176.12.

Yum! Brands, Inc. (NYSE:YUM - Get Free Report) shares reached a new 52-week high during mid-day trading on Tuesday . The stock traded as high as $169.72 and last traded at $169.6480, with a volume of 113801 shares trading hands. The stock had previously closed at $165.99.

Wall Street Analyst Weigh In

YUM has been the subject of a number of research analyst reports. UBS Group reiterated a "buy" rating on shares of Yum! Brands in a research note on Thursday, June 18th. Deutsche Bank Aktiengesellschaft set a $177.00 price objective on shares of Yum! Brands in a research report on Thursday, April 30th. Citigroup raised their target price on shares of Yum! Brands from $174.00 to $175.00 and gave the stock a "neutral" rating in a report on Thursday, April 30th. Royal Bank Of Canada reaffirmed a "sector perform" rating and issued a $165.00 target price on shares of Yum! Brands in a research report on Monday, April 20th. Finally, TD Cowen reiterated a "buy" rating and set a $180.00 target price on shares of Yum! Brands in a research note on Tuesday, June 16th. Twelve research analysts have rated the stock with a Buy rating and seven have issued a Hold rating to the company's stock. According to MarketBeat.com, Yum! Brands presently has an average rating of "Moderate Buy" and a consensus target price of $176.12.

Yum! Brands Price Performance

The stock's 50-day simple moving average is $153.86 and its two-hundred day simple moving average is $156.45. The firm has a market capitalization of $46.57 billion, a P/E ratio of 27.31, a price-to-earnings-growth ratio of 2.10 and a beta of 0.56.

Yum! Brands (NYSE:YUM - Get Free Report) last issued its quarterly earnings data on Wednesday, April 29th. The restaurant operator reported $1.50 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.39 by $0.11. The business had revenue of $2.06 billion for the quarter, compared to analysts' expectations of $2.04 billion. Yum! Brands had a negative return on equity of 23.51% and a net margin of 20.48%.The company's revenue for the quarter was up 15.2% on a year-over-year basis. During the same period in the prior year, the firm earned $1.30 EPS. On average, analysts forecast that Yum! Brands, Inc. will post 6.75 earnings per share for the current fiscal year.

Yum! Brands Announces Dividend

The business also recently disclosed a quarterly dividend, which was paid on Friday, June 12th. Investors of record on Wednesday, May 27th were issued a dividend of $0.75 per share. The ex-dividend date was Wednesday, May 27th. This represents a $3.00 dividend on an annualized basis and a yield of 1.8%. Yum! Brands's dividend payout ratio (DPR) is presently 48.39%.

Yum! Brands declared that its Board of Directors has initiated a stock repurchase program on Tuesday, June 16th that permits the company to repurchase $4.00 billion in outstanding shares. This repurchase authorization permits the restaurant operator to buy up to 9.4% of its shares through open market purchases. Shares repurchase programs are typically an indication that the company's leadership believes its shares are undervalued.

Insider Activity at Yum! Brands

In other news, CEO Sean Tresvant sold 3,000 shares of the stock in a transaction on Tuesday, May 26th. The stock was sold at an average price of $154.68, for a total transaction of $464,040.00. Following the completion of the sale, the chief executive officer owned 3,140 shares in the company, valued at approximately $485,695.20. This represents a 48.86% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, CEO Scott Mezvinsky sold 277 shares of Yum! Brands stock in a transaction that occurred on Friday, May 1st. The stock was sold at an average price of $160.48, for a total transaction of $44,452.96. Following the completion of the sale, the chief executive officer owned 483 shares of the company's stock, valued at $77,511.84. This trade represents a 36.45% decrease in their ownership of the stock. 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 12,423 shares of company stock worth $1,953,721 over the last quarter. Corporate insiders own 0.14% of the company's stock.

Institutional Investors Weigh In On Yum! Brands

Several hedge funds have recently modified their holdings of YUM. Econ Financial Services Corp grew its stake in Yum! Brands by 0.4% in the 1st quarter. Econ Financial Services Corp now owns 15,536 shares of the restaurant operator's stock valued at $2,416,000 after acquiring an additional 63 shares during the period. Magnolia Capital Advisors LLC raised 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 worth $498,000 after acquiring an additional 63 shares during the period. Augustine Asset Management Inc. lifted its holdings in Yum! Brands by 2.0% during the fourth quarter. Augustine Asset Management Inc. now owns 3,287 shares of the restaurant operator's stock valued at $497,000 after purchasing an additional 64 shares in the last quarter. Essex Financial Services Inc. lifted 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 valued at $1,009,000 after purchasing an additional 66 shares in the last quarter. Finally, Hilltop Holdings Inc. grew its position in shares of Yum! Brands by 2.8% in the fourth quarter. Hilltop Holdings Inc. now owns 2,525 shares of the restaurant operator's stock valued at $382,000 after purchasing an additional 68 shares during the period. 82.37% of the stock is owned by hedge funds and other institutional investors.

About Yum! Brands

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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