Yum Brands (YUM) has outpaced the Dow ($DJI), S&P 500 (SPX) and Nasdaq (COMP) over the past year. Analysts see future earnings growth for YUM, which topped the consensus estimate by an average of 5.4% over the past 4 consecutive quarters.

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.

Solid Growth

Yum! Brands posted fourth-quarter earnings of 46 cents per share, beating the previous year’s 42 cents and exceeding the consensus estimate by 2%. Worldwide sales jumped 6% year-over-year. Same-store-sales advanced by 3% , the company 21st consecutive quarter of same-store-sales growth.

David C. Novak, Chairman and CEO, said, “I’m very pleased to report 14% EPS growth for the full year 2008, ending the year with impressive 17% operating profit growth in the fourth quarter, both before special items. These results for 2008 again exceeded our annual target for at least 10% EPS growth and represent our seventh straight year of at least 13% growth.

Our China and YRI Divisions, which now account for 60% of operating profit, are a major factor in driving this consistency of performance. 2008 was no exception, as we opened a record 1,495 new restaurants outside the U.S., generated worldwide same-store-sales growth of 3%, and grew worldwide operating profit by 8%.”

Growth Should Continue

Yum! Brands has outpaced the Dow ($DJI), S&P 500 (SPX) and Nasdaq (COMP) over the past year.

Analysts see future earnings growth for YUM, which topped the consensus estimate by an average of 5.4% over the past 4 consecutive quarters.

For 2009, analysts project 9% earnings per share growth. For the following year, analysts are forecasting 16% growth.

In addition to the company’s fundamental growth, YUM rewards shareholders with income. The company offers an industry-leading dividend yield of 3%.

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