Zacks Investment Research Reaffirms “Hold” Rating for Yum China (YUMC)
Zacks Investment Research reaffirmed their hold rating on shares of Yum China (NYSE:YUMC) in a research report released on Saturday.
According to Zacks, “Shares of Yum China have outperformed the industry in the past two years. We expect the company to remain on a growth trajectory after its third-quarter 2018 earnings surpassed the Zacks Consensus Estimate. The bottom line also increased 19% from the year-ago quarter on higher revenues. The company’s strong brand portfolio not only gives it a competitive edge but also posits it as the largest restaurant company in China. Its KFC division performed well in the quarter under review. Its differentiated menu offerings across restaurants and enhanced focus on delivery system are the major top-line drivers. Continual expansion through unit openings also bodes well. However, increased costs from labor, rent and operational initiatives may hurt the company’s margins. Further, a lesser franchised business model and slowdown in comps at Pizza Hut division remain concerns.”
YUMC has been the subject of several other reports. Macquarie downgraded Yum China from an outperform rating to a neutral rating in a research report on Thursday, August 2nd. Oppenheimer downgraded Yum China from an outperform rating to a market perform rating and set a $33.00 price objective for the company. in a research report on Friday, August 17th. Bank of America upgraded Yum China from an underperform rating to a neutral rating and upped their price objective for the stock from $34.00 to $35.00 in a research report on Wednesday, October 31st. Finally, UBS Group downgraded Yum China from an outperform rating to a market perform rating in a research report on Friday, August 17th. Five research analysts have rated the stock with a hold rating and one has given a buy rating to the company. The company currently has an average rating of Hold and an average target price of $42.75.
Yum China (NYSE:YUMC) last announced its quarterly earnings data on Tuesday, October 30th. The company reported $0.51 earnings per share for the quarter, topping the consensus estimate of $0.45 by $0.06. Yum China had a return on equity of 20.73% and a net margin of 6.23%. The business had revenue of $2.21 billion during the quarter, compared to the consensus estimate of $2.24 billion. During the same period in the prior year, the company earned $0.52 EPS. Yum China’s revenue for the quarter was up 3.8% on a year-over-year basis. On average, research analysts expect that Yum China will post 1.51 earnings per share for the current fiscal year.
The company also recently announced a quarterly dividend, which will be paid on Tuesday, December 18th. Shareholders of record on Tuesday, November 27th will be given a $0.12 dividend. The ex-dividend date is Monday, November 26th. This is an increase from Yum China’s previous quarterly dividend of $0.10. This represents a $0.48 annualized dividend and a yield of 1.37%. Yum China’s dividend payout ratio (DPR) is currently 28.17%.
In other Yum China news, insider Angela Ai sold 4,529 shares of the stock in a transaction dated Friday, September 7th. The stock was sold at an average price of $38.25, for a total value of $173,234.25. Following the completion of the transaction, the insider now directly owns 9,000 shares in the company, valued at $344,250. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. Also, insider Ted Lee sold 3,795 shares of the stock in a transaction dated Wednesday, November 14th. The shares were sold at an average price of $36.26, for a total value of $137,606.70. The disclosure for this sale can be found here. Insiders sold 25,120 shares of company stock valued at $930,188 over the last quarter. Corporate insiders own 0.37% of the company’s stock.
A number of institutional investors have recently bought and sold shares of the business. Kovack Advisors Inc. raised its position in Yum China by 24.8% in the third quarter. Kovack Advisors Inc. now owns 7,583 shares of the company’s stock valued at $266,000 after purchasing an additional 1,505 shares during the last quarter. North Star Asset Management Inc. raised its position in shares of Yum China by 2.4% during the second quarter. North Star Asset Management Inc. now owns 72,983 shares of the company’s stock worth $2,807,000 after acquiring an additional 1,715 shares during the last quarter. Atria Investments LLC raised its position in shares of Yum China by 28.1% during the second quarter. Atria Investments LLC now owns 9,081 shares of the company’s stock worth $349,000 after acquiring an additional 1,990 shares during the last quarter. Baldwin Investment Management LLC raised its position in shares of Yum China by 27.3% during the second quarter. Baldwin Investment Management LLC now owns 9,785 shares of the company’s stock worth $376,000 after acquiring an additional 2,100 shares during the last quarter. Finally, Pinnacle Financial Partners Inc. raised its position in shares of Yum China by 8.8% during the second quarter. Pinnacle Financial Partners Inc. now owns 28,294 shares of the company’s stock worth $1,088,000 after acquiring an additional 2,278 shares during the last quarter. Hedge funds and other institutional investors own 77.39% of the company’s stock.
About Yum China
Yum China Holdings, Inc owns, operates, and franchises restaurants in China. The company operates in two segments, KFC and Pizza Hut. It operates restaurants under the KFC, Pizza Hut, Taco Bell, East Dawning, and Little Sheep brands, which specialize in chicken, pizza, hot pot cooking, Chinese food, and Mexican-style food categories.
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