Zacks Investment Research cut shares of Yum China (NYSE:YUMC) from a hold rating to a sell rating in a report published on Saturday morning.

According to Zacks, “Shares of Yum China have underperformed the industry over the past year. Increased costs from labor, rent and operational initiatives may hurt the company’s margins. As majority of the restaurants are company owned, the non-franchised model makes Yum China susceptible to increased expenses. The company, not signing enough franchise agreements, is unable to put the burden of costs onto the franchise and is solely responsible for the expenses of operating the business. Also, sales trend of Pizza Hut has been choppy in the recent quarters. However, we are encouraged by the company’s strong brand portfolio. It not only lends the company competitive edge but also posits it as the largest restaurant company in China. 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.”

Separately, Bank of America raised Yum China from an underperform rating to a neutral rating and boosted their price target for the stock from $34.00 to $35.00 in a research report on Wednesday, October 31st. One research analyst has rated the stock with a sell rating, four have assigned a hold rating and one has assigned a buy rating to the company’s stock. The stock has a consensus rating of Hold and a consensus target price of $38.67.

NYSE:YUMC opened at $34.67 on Friday. The company has a market cap of $13.23 billion, a price-to-earnings ratio of 24.42, a P/E/G ratio of 1.53 and a beta of 0.63. Yum China has a twelve month low of $30.10 and a twelve month high of $48.75. The company has a current ratio of 1.72, a quick ratio of 1.49 and a debt-to-equity ratio of 0.01.

Yum China (NYSE:YUMC) last posted its quarterly earnings results on Tuesday, October 30th. The company reported $0.51 earnings per share for the quarter, topping the Thomson Reuters’ consensus estimate of $0.44 by $0.07. The firm had revenue of $2.21 billion for the quarter, compared to analyst estimates of $2.24 billion. Yum China had a return on equity of 20.73% and a net margin of 6.23%. The business’s quarterly revenue was up 3.8% on a year-over-year basis. During the same quarter in the previous year, the firm earned $0.52 EPS. Research analysts forecast that Yum China will post 1.51 EPS for the current fiscal year.

The business also recently declared a quarterly dividend, which was paid on Tuesday, December 18th. Shareholders of record on Tuesday, November 27th were given a dividend of $0.12 per share. This is a positive change from Yum China’s previous quarterly dividend of $0.10. The ex-dividend date of this dividend was Monday, November 26th. This represents a $0.48 annualized dividend and a dividend yield of 1.38%. Yum China’s payout ratio is 33.80%.

In related news, insider Angela Ai sold 8,391 shares of the business’s stock in a transaction that occurred on Thursday, November 8th. The stock was sold at an average price of $37.25, for a total transaction of $312,564.75. Following the transaction, the insider now directly owns 17,127 shares of the company’s stock, valued at approximately $637,980.75. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, insider Ted Lee sold 3,795 shares of the business’s stock in a transaction that occurred on Wednesday, November 14th. The stock was sold at an average price of $36.26, for a total value of $137,606.70. Following the transaction, the insider now directly owns 1,863 shares in the company, valued at $67,552.38. The disclosure for this sale can be found here. Insiders have sold a total of 20,591 shares of company stock worth $756,954 in the last ninety days. Insiders own 0.37% of the company’s stock.

Several hedge funds have recently bought and sold shares of the stock. YHB Investment Advisors Inc. increased its holdings in shares of Yum China by 1.1% during the 4th quarter. YHB Investment Advisors Inc. now owns 71,298 shares of the company’s stock worth $2,391,000 after acquiring an additional 785 shares during the last quarter. Vigilant Capital Management LLC increased its holdings in shares of Yum China by 62.9% during the 4th quarter. Vigilant Capital Management LLC now owns 2,280 shares of the company’s stock worth $76,000 after acquiring an additional 880 shares during the last quarter. Kovack Advisors Inc. increased its holdings in shares of Yum China by 24.8% during the 3rd quarter. Kovack Advisors Inc. now owns 7,583 shares of the company’s stock worth $266,000 after acquiring an additional 1,505 shares during the last quarter. Commonwealth Equity Services LLC increased its holdings in shares of Yum China by 2.4% during the 3rd quarter. Commonwealth Equity Services LLC now owns 96,352 shares of the company’s stock worth $3,382,000 after acquiring an additional 2,282 shares during the last quarter. Finally, Cerebellum GP LLC increased its holdings in shares of Yum China by 41.7% during the 4th quarter. Cerebellum GP LLC now owns 7,948 shares of the company’s stock worth $266,000 after acquiring an additional 2,337 shares during the last quarter. 77.65% of the stock is currently owned by institutional investors and hedge funds.

Yum China Company Profile

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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