Insider Selling: Yum! Brands (NYSE:YUM) VP Sells $1,219,227.15 in Stock

Yum! Brands, Inc. (NYSE:YUM) VP David Eric Russell sold 7,961 shares of the business’s stock in a transaction on Monday, August 3rd. The stock was sold at an average price of $153.15, for a total transaction of $1,219,227.15. Following the sale, the vice president owned 11,960 shares in the company, valued at $1,831,674. The trade was a 39.96% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Yum! Brands Trading Up 0.6%

Shares of NYSE:YUM traded up $0.85 on Tuesday, reaching $149.65. 301,350 shares of the company were exchanged, compared to its average volume of 2,081,538. The company has a 50-day moving average of $153.81 and a 200-day moving average of $156.66. The firm has a market cap of $41.25 billion, a price-to-earnings ratio of 18.82, a price-to-earnings-growth ratio of 1.95 and a beta of 0.55. Yum! Brands, Inc. has a 1-year low of $137.33 and a 1-year high of $170.14.

Yum! Brands (NYSE:YUM) last announced its quarterly earnings data on Thursday, July 30th. The restaurant operator reported $1.62 EPS for the quarter, beating the consensus estimate of $1.58 by $0.04. The firm had revenue of $2.17 billion during the quarter, compared to analysts’ expectations of $2.18 billion. Yum! Brands had a net margin of 25.42% and a negative return on equity of 24.57%. The business’s revenue for the quarter was up 12.2% compared to the same quarter last year. During the same quarter last year, the business earned $1.44 earnings per share. As a group, analysts forecast that Yum! Brands, Inc. will post 6.66 earnings per share for the current year.

Yum! Brands Announces Dividend

The company also recently declared a quarterly dividend, which was paid on Friday, June 12th. Investors of record on Wednesday, May 27th were issued a $0.75 dividend. The ex-dividend date was Wednesday, May 27th. This represents a $3.00 dividend on an annualized basis and a dividend yield of 2.0%. Yum! Brands’s dividend payout ratio is currently 37.74%.

Yum! Brands declared that its board has authorized a stock repurchase plan on Tuesday, June 16th that permits the company to repurchase $4.00 billion in shares. This repurchase authorization permits the restaurant operator to purchase up to 9.4% of its shares through open market purchases. Shares repurchase plans are often a sign that the company’s board of directors believes its stock is undervalued.

Analyst Ratings Changes

A number of equities research analysts recently commented on YUM shares. BMO Capital Markets reissued a “market perform” rating and issued a $168.00 price objective on shares of Yum! Brands in a research note on Monday, May 4th. Morgan Stanley raised shares of Yum! Brands from an “equal weight” rating to an “overweight” rating and upped their price target for the company from $180.00 to $185.00 in a report on Wednesday, June 3rd. Wells Fargo & Company increased 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. Citigroup raised their price objective on shares of Yum! Brands from $175.00 to $178.00 and gave the stock a “neutral” rating in a research note on Sunday, July 12th. Finally, Deutsche Bank Aktiengesellschaft restated a “hold” rating and set a $174.00 price objective on shares of Yum! Brands in a research report on Friday. Eleven research analysts have rated the stock with a Buy rating and seven have given a Hold rating to the company. According to data from MarketBeat.com, the company has an average rating of “Moderate Buy” and a consensus target price of $174.94.

Key Headlines Impacting Yum! Brands

Here are the key news stories impacting Yum! Brands this week:

• Positive Sentiment: Taco Bell credited its loyalty program with strong digital-sales growth and plans to launch a redesigned app in the third quarter. Improved engagement and ordering frequency could help the brand recover customer traffic. Taco Bell credits its loyalty program for digital sales growth
• Positive Sentiment: Yum!’s $4 billion share-repurchase authorization, equivalent to as much as 9.4% of shares, could support earnings per share and signal management’s confidence in the company’s valuation.
• Positive Sentiment: Fundsmith’s investment commentary highlighted Yum!’s rapid international expansion as a long-term growth driver, offering geographic diversification beyond the current Taco Bell issues. Yum! Brands: Rapid Global Expansion Drives Growth
• Neutral Sentiment: CEO Christopher Lee Turner sold 261 shares for approximately $40,000, and CEO Scott Mezvinsky sold 268 shares for about $41,000. Both transactions were made under pre-arranged Rule 10b5-1 plans, making them a limited discretionary signal; Turner retained roughly 63,771 shares. Yum! Brands CEO insider sale
• Neutral Sentiment: Discussion of a potential Pizza Hut-less Yum! Brands raises strategic questions, but no separation or transaction has been announced. What does a Pizza Hut-less Yum Brands look like?
• Negative Sentiment: Reports that Michigan officials contacted Yum! about the cyclospora outbreak weeks before a public alert have intensified concerns over Taco Bell’s response and potential reputational, sales and financial damage. Additional reported deaths have further increased investor anxiety. Michigan warned Taco Bell before public cyclospora alert

Institutional Investors Weigh In On Yum! Brands

A number of hedge funds and other institutional investors have recently made changes to their positions in the business. Norges Bank acquired a new position in Yum! Brands in the 4th quarter worth $706,799,000. Capital International Investors lifted its position in shares of Yum! Brands by 20.0% in the fourth quarter. Capital International Investors now owns 19,419,826 shares of the restaurant operator’s stock worth $2,938,139,000 after buying an additional 3,240,190 shares during the last quarter. Alyeska Investment Group L.P. bought a new stake in Yum! Brands during the fourth quarter worth approximately $272,794,000. Invesco Ltd. boosted its holdings in shares of Yum! Brands by 42.2% during the 4th quarter. Invesco Ltd. now owns 4,183,964 shares of the restaurant operator’s stock worth $632,950,000 after buying an additional 1,240,777 shares during the period. Finally, Boston Partners bought a new position in Yum! Brands in the 4th quarter worth $168,604,000. Hedge funds and other institutional investors own 82.37% of the company’s stock.

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.