Yum! Brands (YUM)
Consumer · NYSE · US
Fundamentals
Valuation and ratings
Yum! Brands trades at $152.10, which is 57% below the $238.70 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.
Our moat model scores it 58 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 26.4 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Yum! Brands
Yum! Brands, Inc., together with its subsidiaries, develops, operates, and franchises traditional and non-traditional quick service restaurants in the United States, China, and internationally. The company operates in four segments: KFC Division, Taco Bell Division, Pizza Hut Division, and Habit Burger & Grill Division. It also operates restaurants under the KFC, Pizza Hut, Taco Bell, and Habit Burger & Grill brands, which specialize in chicken, Mexican-style food and pizza categories, made-to-order chargrilled burgers, sandwiches, and other products. The company was formerly known as TRICON Global Restaurants, Inc. and changed its name to Yum! Brands, Inc. in May 2002. Yum! Brands, Inc. was incorporated in 1997 and is headquartered in Louisville, Kentucky.
YUM passes 4 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
5 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- William Von Mueffling, CANTILLON CAPITAL MANAGEMENT LLC$563.40M · 1.9% of book
- Ken Griffin, CITADEL ADVISORS LLC$443.89M · 0.1% of book
- Steve Cohen, Point72 Asset Management, L.P.$244.06M · 0.3% of book
- Capital Research Global, Capital Research Global Investors$213.80M · 0.0% of book
- Thomas Gayner, MARKEL GROUP INC.$38.13M · 0.2% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Yum! Brands (YUM) undervalued?
Against our discounted cash flow estimate of $238.70, YUM at $152.10 is 57% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own YUM?
5 of the institutions we track reported a position in YUM in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is YUM's P/E ratio?
YUM trades at 26.4 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.