When people think of global fast-food chains or quick service restaurants (QSRs), McDonald's (NYSE: MCD) or Burger King (NYSE: BKC) often spring to mind. But in China, India, or other fast-growing emerging markets, you'll be more likely to find a KFC or a Pizza Hut. These global franchises are owned and operated by Yum! Brands (NYSE: YUM), and shares in this multinational company are nearing a 52-week high.
The KFC brand is the largest, with more than 3,000 stores in 600 cities in China alone. Pizza Hut is in more than 120 cities in China with more than 460 stores. Yum! Brands also plans on opening a mix of about 320 additional stores in the remainder of 2010.
This growth is so astounding because the company has also significantly increased profits, even amid its rapid expansion. In the first quarter of 2010, profit in China grew by 37.5%, followed by 32% growth in the second quarter.
Investors can also be excited about Yum! Brands' growth potential in India, another booming emerging market. KFC has more than 70 units in India; there are more than 160 Pizza Huts in India; and Yum! opened the country's first Taco Bell in March. All in all, it's India's fastest-growing restaurant company.
Yum! has committed to spend more than $150 million to rapidly increase its growth in India, by increasing exposure to these three brands. Management hopes that this commitment will allow the company to have more than 1,000 stores in India by 2015.
Whether or not you're a fan of fast food, Yum!'s growth potential looks mighty tasty.
