Where does Yum! Brands rank after its 11% announced dividend increase?

yum

Yum! Brands Incorporated announced a regular quarterly dividend of $0.51, an 11 percent increase from the prior rate of $0.46 per share. The dividend will be paid at the new higher rate on November 4, 2016, to shareholders of record at close of business on October 19, 2016.

Listed in the table below are the quarterly dividend payments since 2010. Our analysis of Yum as a Top 100 Dividend Stock candidate is listed below;

Date Quarterly Dividend
10/17/2016 0.51
7/13/2016 0.46
4/13/2016 0.46
1/13/2016 0.46
10/14/2015 0.46
7/15/2015 0.41
4/8/2015 0.41
1/14/2015 0.41
10/15/2014 0.41
7/9/2014 0.37
4/9/2014 0.37
1/15/2014 0.37
10/9/2013 0.37
7/10/2013 0.335
4/10/2013 0.335
1/9/2013 0.335
10/10/2012 0.335
7/11/2012 0.285
4/11/2012 0.285
1/11/2012 0.285
10/12/2011 0.285
7/13/2011 0.25
4/13/2011 0.25
1/12/2011 0.25
10/13/2010 0.25
7/14/2010 0.21
4/14/2010 0.21
1/13/2010 0.21

Analysis of YUM! Brands is based upon our five key criteria for the Top 100 list, which include; 

Category Value Score
Dividend Yield 2.06 152
Dividend Growth (5 year VL) 14% 74
Trailing P/E 27.10 211
S&P Financial Rating B++ 160
Beta 0.91 100
Total Ranking #170 697

Additional Information;

Price 9/27/16 % Yield 5 Year Div. Growth Rate  SPS    2016 P/S Ratio 10 yr P/S Low 10 yr P/S  High 5 yr max Yield % 5 yr lowest Yield %
$89.86 2.06% 14% 38.60 2.33 0.87 2.33 2.62% 1.50%

Final Analysis;

  • Yum!’s dividend yield is higher than that of the S&P 500 Index and is also trading towards the higher end of its average historical dividend yield.
  • Yum! maintains a 5 year dividend growth rate of 14%   This is lower than 22 other companies in the sector and ranks 74 among all companies.
  • Yum! has paid out a dividend consecutively for the past 13 years.
  • Yum! is trading at the top of its average price/sales (P/S) range at 2.33.  From a relative valuation perspective, Yum is overvalued based upon its historical trading history.
  • Yum! maintains a credit rating of B++. This is below investment grade, a negative. It was downgraded by S&P last December.
  • Yum! maintains a beta of 0.91, lower than the average company.
  • Yum!’s total ranking is 170.

Based upon its high P/S ratio and poor credit rating, Yum! does not qualify as one of our Top 100 Dividend Stocks.

Yum! Brands Inc. Dividend Yield Chart (Click to enlarge)

yum3

Chart Explanation:  Dividend growth stocks may be viewed favorably when the current yield is above historical readings for the past 5 years.

Further information on dividend investing and evaluating dividend growth candidates can be found at http://seekingalpha.com/author/timothy-mcintosh/articles

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