Yum! Brands (YUM) Rewards Investors With 12% Dividend Hike
Zacks Investment Research | Jan 26, 2020 08:56PM ET
Yum! Brands Inc. (NYSE:YUM) announced a 12% increase in its quarterly dividend to 47 cents per share. The raised dividend will be paid out on Mar 6, 2020 to its shareholders of record as of Feb 14. Notably, the dividend yield, based on the new payout and the last closing price, is approximately 1.8%.
On Feb 13, 2019, Yum Brands increased its dividend by 17% from 36 cents to 42 cents. The company’s steady dividend payout history is likely to make it an attractive investment choice for value investors or those seeking a stable stream of investment income.
Consistent dividend hikes highlight the company's financial stability and ability to sustain profits. Its attempt to enhance long-term shareholders' value, even in a volatile economic environment, is appreciable.
Rationale Behind the Dividend Hike
Yum! Brands’ strategic transformation plan to drive growth, efforts to boost the domestic business through various digital initiatives and refranchising efforts bode well.
The company aims to revamp its financial profile, and thereby improve the efficiency of its organization and cost structure globally. It believes that a “slimmer Yum Brands” would lead to efficiency gains.
In addition, the company aims to maintain an optimized capital structure, with the leverage of five times EBITDA. Over the next three years, it is committed to returning additional $6.5-$7 billion to shareholders through share repurchases and dividend payouts. Resultantly, it expects EPS to be at least $3.75 in the fourth quarter of 2019.
Furthermore, Yum! Brands’ efforts to boost its three iconic global brands and create more efficient cost structure are quite encouraging. Shares of the company have gained 13.4% in the past year compared with the Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.