Yum! Brands, Inc. Declares Quarterly Dividend of $0.67 Per Share and Announces Authorization of up to $2.0 Billion in Share Repurchases

Rhea-AI Summary

Yum! Brands has declared a quarterly dividend of $0.67 per share, to be distributed on June 7, 2024, for shareholders of record as of May 28, 2024. The company also announced a new share repurchase authorization of up to $2.0 billion, effective from July 1, 2024, through December 31, 2026. Yum! Brands operates over 59,000 restaurants worldwide, including KFC, Taco Bell, Pizza Hut, and The Habit Burger Grill. The company's recent accolades include being named to the Dow Jones Sustainability Index North America and receiving recognition from TIME Magazine and Newsweek for corporate responsibility and leadership. The previous share repurchase authorization, approved in September 2022, will expire on June 30, 2024.

Positive

• Quarterly dividend of $0.67 per share declared.
• New share repurchase authorization of up to $2.0 billion.
• Distribution begins on June 7, 2024.
• Authorization valid from July 1, 2024, to December 31, 2026.
• Yum! Brands operates over 59,000 restaurants in more than 155 countries.
• Included in the Dow Jones Sustainability Index North America for the eighth consecutive year.
• Recognized by TIME Magazine and Newsweek for corporate responsibility and leadership.

Negative

• Previous share repurchase authorization expiring on June 30, 2024.

Insights

Financial Analyst

Yum! Brands announcing a $0.67 per share quarterly dividend and a share repurchase authorization of up to $2.0 billion can have significant implications for investors. Dividends signal financial stability and the ability to generate cash, while buybacks can indicate that the company believes its stocks are undervalued.

Firstly, the dividend provides a predictable income stream for shareholders, which is especially appealing to income-focused investors. This action may suggest that Yum! Brands is confident in its future cash flows and profitability. However, it's essential to monitor the payout ratio, which indicates the proportion of earnings paid out as dividends. A high payout ratio might not be sustainable in the long term if earnings don't keep pace.

The share repurchase authorization is a substantial commitment, indicating that the company has a robust balance sheet and free cash flow. When a company buys back its shares, it reduces the number of outstanding shares, potentially increasing earnings per share (EPS) and driving stock prices higher. However, it's important to consider whether this capital might be better employed in growth initiatives or debt reduction instead of buybacks.

Retail investors should also be aware of the timing of these repurchases. The authorization extends from July 2024 to December 2026, which provides flexibility but also means the impact may be spread out over several years. It's essential to stay updated on the pace and scale of these buybacks as they occur.

Market Research Analyst

Analyzing the broader market implications of Yum! Brands' recent announcements, the dividend and share repurchase authorization reveal a strategic confidence in maintaining shareholder value. Yum! Brands operates in a competitive and evolving fast-food industry, with major players constantly vying for market share. The company's decision to return value to shareholders through dividends and buybacks can be seen as a signal of solid market position and financial health.

However, potential investors should also consider the opportunity cost of these financial strategies. The fast-food market is rapidly changing, with trends such as health-conscious eating, technological advancements in delivery and sustainability becoming increasingly important. By allocating a significant portion of capital to dividends and buybacks, Yum! Brands might be limiting its ability to invest in these areas.

Additionally, the company’s established brands like KFC, Taco Bell and Pizza Hut continue to perform well, but the competitive landscape is fierce. Keeping an eye on how Yum! Brands balances these shareholder returns with necessary investments in innovation and market expansion will be critical for long-term growth prospects.

LOUISVILLE, Ky.--(BUSINESS WIRE)-- Yum! Brands, Inc. (NYSE: YUM) Board of Directors declared a dividend of $0.67 per share of common stock. The quarterly dividend will be distributed June 7, 2024 to shareholders of record at the close of business on May 28, 2024.

Yum’s Board of Directors also approved a new share repurchase authorization which authorizes repurchases of up to $2.0 billion in shares of common stock from July 1, 2024, through December 31, 2026. The prior outstanding authorization approved in September 2022 expires on June 30, 2024.

Yum! Brands, Inc., based in Louisville, Kentucky, and its subsidiaries franchise or operate a system of over 59,000 restaurants in more than 155 countries and territories under the company’s concepts – KFC, Taco Bell, Pizza Hut and the Habit Burger Grill. The Company's KFC, Taco Bell and Pizza Hut brands are global leaders of the chicken, Mexican-style food, and pizza categories, respectively. The Habit Burger Grill is a fast casual restaurant concept specializing in made-to-order chargrilled burgers, sandwiches and more. In 2024, Yum! was named to the Dow Jones Sustainability Index North America for the eighth consecutive year, and the company was recognized among TIME Magazine’s list of Best Companies for Future Leaders and Newsweek’s list of America’s Most Responsible Companies. Yum! also received widespread recognition in 2023, including being listed on the Bloomberg Gender-Equality Index; Forbes’ list of America’s Best Employers for Diversity; and Newsweek’s list of America’s Greenest Companies. In addition, KFC, Taco Bell and Pizza Hut brands were ranked in the top five of Entrepreneur’s Top Global Franchises Ranking for 2023.

Category: Financial

View source version on businesswire.com: https://www.businesswire.com/news/home/20240515182021/en/

Analysts are invited to contact:

Matt Morris, Head of Investor Relations, at 888/298-6986

Members of the media are invited to contact:

Virginia Ferguson, Vice President, Public Relations, at 502/874-8200

Source: Yum! Brands, Inc.

FAQ

What is the dividend declared by Yum! Brands for 2024?

Yum! Brands has declared a quarterly dividend of $0.67 per share for 2024.

When will Yum! Brands distribute the declared dividend?

Yum! Brands will distribute the dividend on June 7, 2024.

What is the record date for Yum! Brands' dividend distribution?

The record date for the dividend distribution is May 28, 2024.

How much is Yum! Brands' new share repurchase authorization?

Yum! Brands' new share repurchase authorization is up to $2.0 billion.

When does the new share repurchase authorization by Yum! Brands start and end?

The new share repurchase authorization starts on July 1, 2024, and ends on December 31, 2026.

Which Yum! Brands' share repurchase authorization is expiring in 2024?

The share repurchase authorization approved in September 2022 is expiring on June 30, 2024.

How many restaurants does Yum! Brands operate globally?

Yum! Brands operates over 59,000 restaurants in more than 155 countries.