April 20, 2025 a 11:31 am
YUM: Dividend Analysis - Yum! Brands, Inc.
Yum! Brands, Inc., the operator behind KFC, Taco Bell, and Pizza Hut, boasts a robust dividend profile. With a dividend history that spans over two decades, the company demonstrates a strong commitment to returning capital to shareholders. Nevertheless, its current dividend yield indicates a moderate income stream relative to industry averages. The payout strategy remains balanced, aligning well with its earnings and free cash flow capabilities. Investors seeking a reliable dividend provider in the consumer discretionary sector may find Yum! Brands, Inc. appealing.
📊 Overview
| Metric | Details |
|---|---|
| Sector | Consumer Discretionary |
| Dividend Yield | 1.83% |
| Current Dividend per Share | 2.67 USD |
| Dividend History | 22 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
Yum! Brands, Inc. has maintained an impressive track record in paying dividends for 22 consecutive years, indicating resilience and consistency in its earnings power. Such a track record instills confidence in long-term investors focused on dividends as a source of income. Sustainable dividend payments reflect financial health and operational stability.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 0.71 |
| 2024 | 2.68 |
| 2023 | 2.42 |
| 2022 | 2.28 |
| 2021 | 2.00 |
📈 Dividend Growth
The growth in dividends over the recent years points to Yum! Brands, Inc.'s capability to enhance shareholder returns. The company's dividend growth over the past three to five years underscores its commitment to reward investors while maintaining a sustainable cash flow model.
| Time | Growth |
|---|---|
| 3 years | 10.25% |
| 5 years | 9.79% |
The average dividend growth is 9.79% over 5 years. This shows moderate but steady dividend growth.
✅ Payout Ratio
Earnings and free cash flow payout ratios are fundamental in assessing dividend sustainability. The current EPS-based payout ratio of 50.61% and free cash flow-based payout ratio of 51.68% suggest that Yum! Brands is adopting a prudent approach to dividends while keeping a buffer for reinvestment and unforeseen events.
| Key Figure | Ratio |
|---|---|
| EPS-based | 50.61% |
| Free cash flow-based | 51.68% |
Both payout ratios indicate a well-managed balance between rewarding shareholders and conserving adequate resources for growth initiatives and debt obligations.
⚖️ Cashflow & Capital Efficiency
Analyzing cash flows is crucial for understanding the real financial health of a company. Yum! Brands demonstrates healthy cash flow metrics and capital efficiency. Key indicators suggest strong cash flow generation which supports its dividend policy and investment capabilities.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 4.46% | 3.59% | 3.13% |
| Earnings Yield | 3.93% | 4.35% | 3.62% |
| CAPEX to Operating Cash Flow | N/A | 17.78% | 19.55% |
| Stock-based Compensation to Revenue | 0.91% | 1.34% | 1.23% |
| Free Cash Flow / Operating Cash Flow Ratio | 100% | 82.22% | 80.44% |
Yum! Brands displays consistent cash flow stability, indicating solid capital efficiency and the ability to meet both operational needs and strategic opportunities.
⚠️ Balance Sheet & Leverage Analysis
Assessing the balance sheet and leverage ratios is critical to understand the financial resilience of Yum! Brands. The data illustrate that the company manages its leverage effectively, although certain ratios such as debt-to-equity reflect higher financial risk which could impact future financial flexibility.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | -160.64% | -153.10% | -133.52% |
| Debt-to-Assets | 182.64% | 193.08% | 202.72% |
| Debt-to-Capital | 264.90% | 288.31% | 398.35% |
| Net Debt to EBITDA | 4.42 | 4.64 | 4.79 |
| Current Ratio | 147.44% | 125.99% | 96.64% |
| Quick Ratio | 147.44% | 125.99% | 70.09% |
| Financial Leverage | -87.96% | -79.29% | -65.86% |
While the company employs significant leverage, its ability to cover interest and maintain liquidity provides a cushion against operational volatility.
💪 Fundamental Strength & Profitability
Fundamental strength and profitability metrics are key to evaluating Yum! Brands' overall business health and efficiency. The company displays a mix of solid profitability potential, although the ROE is negative, signalling room for improvement in capital management.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | -19.43% | -20.32% | -14.93% |
| Return on Assets | 22.09% | 25.63% | 22.67% |
| Return on Invested Capital | 34.26% | 40.04% | 37.43% |
| Net Profit Margin | 19.68% | 22.57% | 19.37% |
| EBIT Margin | 31.65% | 32.94% | 32.14% |
| EBITDA Margin | 33.96% | 35.10% | 35.00% |
| Gross Margin | 47.48% | 49.41% | 48.33% |
| R&D to Revenue | 0% | 0% | 0% |
Despite the current negative return on equity, strong returns on assets and invested capital underscore operational efficiency, providing stable income potential.
📉 Price Development
🏆 Dividend Scoring System
| Category | Score | Indicator |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 5 | |
| Dividend Growth | 4 | |
| Payout Ratio | 4 | |
| Financial Stability | 3 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 3 |
Total Score: 31 / 40
🔹 Rating
Yum! Brands, Inc. receives a favorable dividend analysis score, depicting a strong commitment to shareholder distributions. However, potential investors should be mindful of its current leverage levels and the associated financial risks. With stable dividend growth and payout ratios in check, Yum! remains an attractive choice for those looking for a balanced income and growth strategy in the consumer discretionary sector.