Much of the news yesterday concerning Yum! Brands
Yum!, which had most recently been paying a quarterly dividend of $0.15 per share, announced it will increase its dividend to $0.30 per share. While this doesn't sound like much on the surface, it brings the company's current yield up to 2%, and it marks a tripling of the company's dividend in a little more than two years. From a funding perspective, the dividend should run the company in the neighborhood of $200 million next year. The company's free cash flow of close to $700 million easily covers the dividend.
In the past couple of years, Yum! has also been actively repurchasing its shares. In the past 12 months, my data provider, Capital IQ, shows that the company has executed $1.2 billion in repurchases. The company plans to continue these repurchases, and given its growth opportunities and the valuation based on its free cash flow, I think this is a very shareholder-friendly thing to do.
What I find most interesting about Yum! are its overseas growth opportunities. Yum! is often mentioned in the same breath with Starbucks
In our Global Gains service, we focus our efforts on companies that call a country other than the U.S. home. But we also pay attention to companies that generate large portions of their revenues and earnings overseas, such as Yum! Brands and Coach
Interested in learning more about companies that do the bulk of their business outside the United States? Take a free trial of our new international investing service, Global Gains.
For more Foolishness on the aforementioned companies, check out:
At the time of publication, Nathan Parmelee owned shares in Starbucks but had no financial interest in any of the other companies mentioned. The Motley Fool has an ironclad disclosure policy. Starbucks is a Motley Fool Stock Advisor selection.
More from The Motley Fool
How to Invest in KFC Stock
To own a piece of this growing restaurant chain, investors need to buy Yum! Brands, its corporate parent.
8 Metrics Highlight Yum! Brands Inc.'s Impressive 3rd Quarter
Yum! Brands' results last week sent the stock sharply higher. Here are the metrics behind the quarter's solid performance.
Yum! Brands Inc. (YUM) Q3 2017 Earnings Conference Call Transcript
YUM earnings call for the period ending September 30, 2017.