In This Article:
Delving into the Dividend Dynamics of Yum Brands Inc
Yum Brands Inc (NYSE:YUM) recently announced a dividend of $0.67 per share, payable on 2024-03-08, with the ex-dividend date set for 2024-02-20. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Yum Brands Inc's dividend performance and assess its sustainability.
What Does Yum Brands Inc Do?
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Yum Brands is a U.S.-based restaurant operator featuring a portfolio of four brands: KFC (29,900 global units at year-end 2023), Pizza Hut (19,866 units), Taco Bell (8,564 units), and The Habit Burger Grill (381 units). With $64 billion in 2023 systemwide sales, the firm is the second-largest restaurant company in the world behind McDonald's ($130 billion), ahead of Restaurant Brands International and Starbucks ($29 billion). Yum is 98% franchised, with the largest franchisee, Yum China, spun out in 2016 (after which Yum China agreed to pay 3% royalties to Yum Brands in perpetuity). Yum is the newest evolution of Tricon, formerly a division of PepsiCo, and generates the bulk of its revenue from franchise royalties and marketing contributions.
A Glimpse at Yum Brands Inc's Dividend History
Yum Brands Inc has maintained a consistent dividend payment record since 2004. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Yum Brands Inc's Dividend Yield and Growth
As of today, Yum Brands Inc currently has a 12-month trailing dividend yield of 1.80% and a 12-month forward dividend yield of 1.99%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Yum Brands Inc's annual dividend growth rate was 8.80%. Extended to a five-year horizon, this rate increased to 10.80% per year. And over the past decade, Yum Brands Inc's annual dividends per share growth rate stands at 4.90%.
Based on Yum Brands Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Yum Brands Inc stock as of today is approximately 3.01%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Yum Brands Inc's dividend payout ratio is 0.47.