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Yum! Brands (YUM) - Bull Of The Day
By Zacks Investment Research on August 24, 2009 | More Posts By Zacks Investment Research | Author's Website
The operator of Taco Bell, Pizza Hut, and KFC fast food chains, Yum! Brands (YUM), reported second quarter results, with double-digit growth in the bottom-line. Earnings per share grew 11% to 50 cents, surpassing the Zacks Consensus Estimate of 43 cents.
Driving growth is the company’s overseas divisions (China and Yum Restaurants International), which constitute the only stable segment of the entire restaurant industry. Both the divisions are on track to grow operating earnings by an average CAGR of 20% and 10%, respectively.
The U.S. operations are also showing signs of revival with an expected operating earnings growth of 5%. We think the stock provides relative safety and moderate growth in a turbulent environment and exposure to faster-growing international markets.
As a result, the company remains confident of its business model and its ability to deliver at least 10% EPS growth in 2009 and beyond consistently. As such, we maintain an Outperform recommendation on the stock.
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