Yum Brands buys back $5.1 billion in stock, issues stock dividend
Sep 27 2016 by Johnny Bowman
The analysts noted that the move was a valuation call.
A number of Reuters analysts recently commented on the stock. The company has announced that it is separating its China business from Yum Brands. The rating firm gave a Outperform rating to this stock in a research note on Sep 23, 2016.Credit Agricole analysts issued their verdict on Yum! Worldwide, the Yum! Brands system opens over six new restaurants per day on average, making it a leader in global retail development.
Yum Brands will offer people a chance to invest in an established entity, while Yum China Holdings is expected to be more volatile, activist investors say.
Yum! Brands shareholders are not required to take any action to receive the shares of Yum China common stock in the distribution, and they will not be required to surrender or exchange their Yum! The stock now has a consensus rating of Hold and an average target price of $89.91. Its yearly sales growth estimates are 1.70%. The firm has a 50-day moving average price of $89.52 and a 200 day moving average price of $84.64. The stock has a market cap of $34.90 billion, a PE ratio of 26.98 and a beta of 0.81.
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YUM! Brands, Inc (YUM) is engaged in restaurant business. This is even though the company also increased its quarterly dividend by 11%. The business had revenue of $3.01 billion for the quarter, compared to analysts' expectations of $3.07 billion. Yum Brands had a return on equity of 213.02% and a net margin of 10.97%. The business's quarterly revenue was down 3.1% on a year-over-year basis. During the same period in the previous year, the business posted $0.69 earnings per share.
The distribution is meant to be tax free, according to Yum, except for any cash distributed in lieu of fractional shares. This transaction occurred on 2016-07-22 totals $161000.41. Following the transaction, the CEO, KFC is left with a stake of 110,418 shares, now valued at $10008288. The transaction was disclosed in a filing with the SEC, which is available through this link. The shares were sold at an average price of $91.72, for a total value of $4,908,670.96. The disclosure for this sale can be found here.
Insiders own 0% percent of the stock. Investment Centers of America Inc. now owns 14,294 shares of the restaurant operator's stock valued at $1,171,000 after buying an additional 1,402 shares during the last quarter. Although Yum! Brands kept building restaurants, revenue growth stalled, reaching $6.9 billion in 2015, the same as in 2012. The company expects to repurchase an additional $1.1 billion shares by the end of the year. For the current quarter the stock has a lowest EPS estimates of $0.99 and high estimate of $1.16. Lone Pine Capital LLC increased its position in shares of Yum Brands by 559.3% in the second quarter. Finally, Washington Trust Bank raised its position in Yum Brands by 1.4% in the second quarter. L P now owns 5,811,681 shares of the restaurant operator's stock worth $481,904,000 after buying an additional 338,573 shares in the last quarter. We believe that the dividend hike reflects the company's strong cash position and solid balance sheet and should bolster investor confidence in the company's financials.
Yum! Brands, Inc. (NYSE:YUM) is expected to release the earnings of its current quarter on 10/5/16 After Market Close. As one of the world's largest restaurant companies, Yum! It will have exclusive rights in Mainland China to KFC, China's leading quick-service restaurant concept, Pizza Hut, the leading casual dining brand, and Taco Bell, which is expanding globally but is not yet in China.