Yum! Brands (YUM) - Bull Of The Day

Yum! Brands, Inc. (YUM) shares are a great way to gain exposure to China as well as other fast-growing international markets, which constitute the only stable segment of the restaurant industry.

Both the overseas divisions of Yum! Brands are expanding rapidly. China (28% of 2008 revenue) and Yum! Restaurants International [YRI] (27% of 2008 revenue) segments are on track to grow operating earnings by an average CAGR of 20% and 10%, respectively, over the next five years. The U.S. operations (50% of revenue) also show signs of revival.

Reinvigorating sales are Taco Bell’s recent product launches, including fruit smoothies and a value menu. KFC U.S. remains Yum!’s one weak spot, with an outdated menu. A key to improvement will be its 1H09 launch of a new grilled chicken line, the first step in Yum!’s strategy to add healthier and more portable menu items.

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