Yum! Brands (NYSE:YUM) Hits New 52-Week High – Time to Buy?

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

Wall Street Analysts Forecast Growth

Several analysts have issued reports on YUM shares. Citigroup upped their target price on Yum! Brands from $174.00 to $175.00 and gave the company a “neutral” rating in a report on Thursday, April 30th. Wells Fargo & Company boosted their price target on shares of Yum! Brands from $160.00 to $165.00 and gave the company an “equal weight” rating in a research report on Thursday, April 30th. Morgan Stanley raised shares of Yum! Brands from an “equal weight” rating to an “overweight” rating and upped their price objective for the company from $180.00 to $185.00 in a report on Wednesday, June 3rd. Deutsche Bank Aktiengesellschaft set a $177.00 price objective on shares of Yum! Brands in a research report on Thursday, April 30th. Finally, Royal Bank Of Canada reaffirmed a “sector perform” rating and set a $165.00 target price on shares of Yum! Brands in a research note on Monday, April 20th. Twelve research analysts have rated the stock with a Buy rating and seven have issued a Hold rating to the company. According to data from MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and a consensus price target of $176.12.

Yum! Brands Stock Up 1.8%

The stock has a market capitalization of $46.57 billion, a PE ratio of 27.31, a price-to-earnings-growth ratio of 2.10 and a beta of 0.56. The stock has a fifty day moving average of $153.86 and a 200-day moving average of $156.45.

Yum! Brands (NYSE:YUM) last announced its quarterly earnings results on Wednesday, April 29th. The restaurant operator reported $1.50 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $1.39 by $0.11. The firm had revenue of $2.06 billion during the quarter, compared to the consensus estimate of $2.04 billion. Yum! Brands had a negative return on equity of 23.51% and a net margin of 20.48%.The firm’s quarterly revenue was up 15.2% compared to the same quarter last year. During the same period in the prior year, the company posted $1.30 earnings per share. Equities research analysts expect that Yum! Brands, Inc. will post 6.75 EPS for the current year.

Yum! Brands Dividend Announcement

The firm also recently disclosed a quarterly dividend, which was paid on Friday, June 12th. Shareholders of record on Wednesday, May 27th were given a $0.75 dividend. The ex-dividend date was Wednesday, May 27th. This represents a $3.00 annualized dividend and a yield of 1.8%. Yum! Brands’s dividend payout ratio is presently 48.39%.

Yum! Brands announced that its Board of Directors has approved a stock buyback program on Tuesday, June 16th that permits the company to buyback $4.00 billion in outstanding shares. This buyback authorization permits the restaurant operator to buy up to 9.4% of its shares through open market purchases. Shares buyback programs are often a sign that the company’s board of directors believes its shares are undervalued.

Insider Activity

In other news, CEO Aaron Powell sold 6,001 shares of the company’s stock in a transaction dated Wednesday, July 1st. The shares were sold at an average price of $160.42, for a total transaction of $962,680.42. Following the completion of the transaction, the chief executive officer owned 12,003 shares of the company’s stock, valued at $1,925,521.26. This represents a 33.33% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Sean Tresvant sold 3,000 shares of the company’s stock in a transaction on Tuesday, May 26th. The stock was sold at an average price of $154.68, for a total value of $464,040.00. Following the sale, the chief executive officer owned 3,140 shares of the company’s stock, valued at approximately $485,695.20. The trade was a 48.86% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last three months, insiders sold 12,423 shares of company stock worth $1,953,721. 0.14% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Yum! Brands

Hedge funds and other institutional investors have recently modified their holdings of the company. Capital International Investors raised its holdings in Yum! Brands by 20.0% in the fourth quarter. Capital International Investors now owns 19,419,826 shares of the restaurant operator’s stock valued at $2,938,139,000 after buying an additional 3,240,190 shares during the period. State Street Corp grew its stake in Yum! Brands by 1.0% during the fourth quarter. State Street Corp now owns 13,164,814 shares of the restaurant operator’s stock worth $1,991,573,000 after buying an additional 124,720 shares during the period. Geode Capital Management LLC increased its position in shares of Yum! Brands by 1.4% in the fourth quarter. Geode Capital Management LLC now owns 8,800,382 shares of the restaurant operator’s stock worth $1,334,427,000 after acquiring an additional 121,304 shares in the last quarter. Norges Bank purchased a new position in shares of Yum! Brands in the 4th quarter valued at $706,799,000. Finally, Morgan Stanley raised its stake in shares of Yum! Brands by 2.4% in the 4th quarter. Morgan Stanley now owns 4,471,127 shares of the restaurant operator’s stock valued at $676,392,000 after acquiring an additional 104,512 shares during the period. 82.37% of the stock is owned by institutional investors and hedge funds.

Yum! Brands Company Profile

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.