Yum! Brands

Yum! Brands, Inc. (YUM - Analyst Report) recently declared a quarterly dividend of 19 cents per share. The company noted that the dividend will be paid out November 7 to shareholders of record at the close of business on October 17. The dividend translates into a yield of 1.9%, which is well above the industry average.

Company Description

Yum! Brands is the world's largest restaurant company in terms of system restaurants with more than 35,000 restaurants in more than 110 countries and territories. Four of YUM’s restaurant brands, KFC, Long John Silver's, Pizza Hut and Taco Bell, are the global leaders of the chicken, quick-service seafood, pizza and Mexican-style food categories. A&W Restaurants is the longest running quick-service franchise chain in America.

The company, which is based in Louisville, Kentucky, saw more than $10 billion in total revenues in 2007, including company sales and franchise fees.

Growth in the Past

YUM, which is trading not too far off a 52-week high in a tough and turbulent market, outperformed the major averages over the past year. The company gained about 10% during that time, while the major averages sunk into negative territory.

Continued Income

The company has an excellent history of rewarding shareholders with higher income through its share repurchase program and its quarterly dividend. YUM noted that it remains a leader among global consumer companies in this key measure. The company added that it has nearly quadrupled its quarterly dividend since the initiation of dividends in May 2004.

In 2007, Yum! returned almost $1.7 billion to shareholders, including over $1.4 billion in share repurchases and nearly $275 million in dividends.

As of September 10, 2008, Yum! has already returned over $1.8 billion to shareholders this year through $1.5 billion of share repurchases and over $300 million in dividends, including this dividend declaration.

Robust Growth

The company reported strong second-quarter results in mid-July. The results included stellar system-sales growth of +43% in mainland China and +15% in Yum! Restaurants International (YRI). The company cited broad-based unit development, same-store-sales growth, and favorable foreign currency translation as catalysts.

YUM also delivered worldwide same-store-sales growth of +4%, including +14% in mainland China, +4% in YRI, and +2% in the U.S.

Earnings per share of 45 cents topped the year-prior 39 cents and exceeded the consensus estimate by 7%. YUM’s earnings per share have been, on average, about 39% ahead of analyst estimates.

Higher Forecasts

The company increased its earnings guidance for the year, expecting to generate $1.89 per share.

Analysts have 2008 earnings per share pegged at $1.90, up from $1.89 over the past 90 trading days.