Yum! Brands, Inc., together with its subsidiaries, develops, operates, and franchises quick service restaurants worldwide. The company operates through the KFC Division, the Taco Bell Division, the Pizza Hut Division, and the Habit Burger Grill Division segments. It also operates restaurants under the KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill brands, which specialize in chicken, pizza, made-to-order chargrilled burgers, sandwiches, Mexican-style food categories, and other food products. The company was formerly known as TRICON Global Restaurants, Inc. and changed its name to Yum! Brands, Inc. in May 2002. Yum! Brands, Inc. was incorporated in 1997 and is headquartered in Louisville, Kentucky.

Yum! Brands looks like a high-quality business, but no longer a cheap one, with strong operating profitability and a notable debt burden. Revenue for the TTM remains at $2.06 billion, while earnings and operating income remain high: net income of $432 million, operating income of $644 million, and EBITDA of $704 million. The margins are impressive for the sector: an operating margin of 31.49% and a net profit margin of 20.48% are consistently above industry medians, which points to strong pricing discipline and the efficiency of the franchising model. ROA of 22.78% and ROI of 48.90% also confirm high returns on assets and capital, although ROE and return on tangible equity do not provide a useful signal because of the capital structure and negative equity. At the same time, the balance sheet remains a weak spot: total shareholder equity is deeply negative, liabilities are high, and long-term debt exceeds $11.5 billion, which increases financial risks and limits revaluation potential. Liquidity looks acceptable, but not comfortable: the current ratio is 1.35, while the quick ratio is effectively zero, so the cushion in current assets is small. In terms of valuation multiples, the stock does not look cheap: a P/E of 25.78 is above the industry median, P/S of 5.46 is very high, and P/FCF of 27.21 also points to a premium versus the sector. The recent P/E trend is rather stable, but it does not show any clear cheapening, while P/S and P/FCF remain elevated, which limits upside. The dividend yield of around 0.49% is too small to meaningfully support the valuation and essentially does not offset the premium multiples. The company’s strengths are earnings stability and a high operating margin; its weaknesses are an expensive valuation, a very weak balance sheet, and limited dividend support. Overall, the fundamentals justify a moderately cautious view: the business is high quality, but the current price already reflects a significant part of its advantages. For an investor, this means there is upside potential, but it is limited, while the risk of a correction due to the debt structure and high valuation remains noticeable.

Yum! Brands, Inc.

Сильный индекс, значительно упал. Быки в растерянности.

Strong index, significantly down. The bulls are confused.

Сильный индекс, незначительно вырос. Рынок на стороне быков.

Strong index, slightly up. The market is on the bulls' side.

Средний индекс, незначительно вырос. Приток средств в лонги остается положительным.

Medium index, slightly up. The inflow of funds into longs remains positive.

Strong margins and high profitability support YUM, but premium multiples and a weak balance sheet limit upside potential.

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the JPMorgan Global Select Equity ETF (Symbol: JGLO) where we have detected an approximate $164.9 million dollar outflow -- that's a 2.4% decrease week over week (from 95,875,000 to 93,550,000). Among the largest underlying components of JGLO, in trading today Ventas Inc (Symbol: VTR) is down about 0.1%, Yum! Brands Inc (Symbol: YUM) is up about 2.1%, and Baker Hughes Company (Symbol: BKR) is higher by about 2.5%. For a complete list of holdings, visit the JGLO Holdings page » The chart below shows the one year price performance of JGLO, versus its 200 day moving average:
Looking at the chart above, JGLO's low point in its 52 week range is $63.17 per share, with $72.3168 as the 52 week high point — that compares with a last trade of $70.57. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Further JGLO Research:
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

JGLO, VTR, YUM, BKR: Large Outflows Detected at ETF

Domino’s Pizza, Inc. DPZ is entering a phase in which pizza demand is less about one ordering channel and more about capturing occasions across delivery, carryout, loyalty and aggregators.
The company’s second-quarter fiscal 2026 results showed that order growth remains central to the story, even as ticket pressure, promotions and cautious consumer spending complicate the near-term setup.
DPZ's Aggregators Are Changing the Playbook
Domino’s continued to expand on Uber and DoorDash and believes it is now the leading pizza player on both platforms. Management still sees room to grow because the brand remains below what it views as its fair share of the broader aggregator marketplace.
The economics matter. Management continues to point to roughly 50% incrementality from aggregator orders, while premium pricing on those platforms is intended to keep franchisee profitability broadly neutral across channels.
Domino's Pizza Inc Price and Consensus
Domino’s Carryout White Space Stands Out
Carryout remains one of Domino’s clearer long-term growth levers. Management has said that when a new store opens, about 80% of the carryout business is incremental, rather than shifted from an existing location.
That supports the case for more U.S. development over time. Domino’s ended the fiscal second quarter with 7,231 U.S. stores and added 26 net U.S. stores in the period, while its carryout share of about 20% leaves room for further penetration.
DPZ's Technology Supports Better Fulfillment
Domino’s orchestration agent is designed to connect third-party ordering and the company’s own operating platform more effectively. The goal is to align food preparation with driver availability and customer pickup timing.
That coordination matters in pizza. A pie made too early can sit before handoff, hurting temperature and the delivery experience. Better timing can protect product quality while supporting aggregator, delivery and carryout growth.
Domino’s Scale Is a Strategic Edge
Domino’s scale gives it tools that smaller operators often lack. Management points to lower market-basket costs for franchisees, a large advertising budget and supply-chain infrastructure as advantages in a promotional restaurant market.
That edge may matter more when pricing flexibility is limited. Papa John's International, Inc. PZZA, which currently carries a Zacks Rank #5 (Strong Sell), is part of the same pizza-demand discussion, as investors assess which brands can balance value messaging with franchisee economics.
Yum! Brands, Inc. YUM, which carries a Zacks Rank #3 (Hold) at present, gives investors another large franchised restaurant model to compare against Domino’s through Pizza Hut. The contrast highlights why digital execution, store density and supply-chain support remain central in pizza competition.
How DPZ's Ratings Capture the Crosscurrents
The bottom line is that Domino’s long-term growth story still has several visible supports, including aggregators, carryout, loyalty, technology and scale. The near term is less clean, with second-quarter U.S. same-store sales up only 0.1% and ticket pressure offsetting meaningful order-count growth.
DPZ currently carries a Zacks Rank #4 (Sell). That rank reflects pressure in the estimate picture, including a decline in fiscal 2026 earnings estimates over the past 30 days.
The Style Scores show the split. Domino’s has a Growth Score of A, underscoring favorable longer-term growth characteristics, while its Momentum Score of F signals weak price and earnings momentum. For investors, that combination points to a business with structural strengths, but a stock that still needs cleaner execution and estimate support before sentiment improves.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Domino's Growth Trends Reflect a New Phase for Pizza Demand

Key Points
Sweetgreen's stock price was hit hard by the cyclospora scare.
It appears that another restaurant chain was the source of the outbreak.
Shares of Sweetgreen (NYSE: SG) rallied on Friday after health officials identified the source of a worrisome illness that has spread rapidly across the U.S.
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A welcome relief
Prior to today, Sweetgreen's stock had lost about a quarter of its value due to concerns regarding the cyclospora parasite that has sickened thousands of people.
The intestinal illness can be spread via contaminated fresh produce. Investors worried that people would avoid Sweetgreen's restaurants for fear that its salads could be a source of the parasite.
Those fears were eased on Friday after the Centers for Disease Control and Prevention told people not to eat shredded iceberg lettuce from Taco Bell restaurants in five states.
The warning followed a Food and Drug Administration (FDA) investigation that reportedly traced the outbreak to one of Taco Bell's suppliers.
Not quite all clear yet
Although shareholders were able to breathe a sigh of relief today, it's important to remember that Sweetgreen was already facing challenges before the Cyclospora outbreak.
The fast-casual chain's same-store sales fell 12.8% in the first quarter, driven by an 11.2% decline in customer traffic. Higher energy costs have weighed on consumers' budgets, forcing many people to cut back on restaurant visits.
Investors can expect to receive an update on Sweetgreen's efforts to boost sales amid a difficult macroeconomic backdrop when it reports its second-quarter financial results on Aug. 6.
Should you buy stock in Sweetgreen right now?
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Sweetgreen and Yum! Brands. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Why Sweetgreen Stock Surged Today

In trading on Wednesday, shares of Yum! Brands Inc (Symbol: YUM) crossed below their 200 day moving average of $154.12, changing hands as low as $152.28 per share. Yum! Brands Inc shares are currently trading down about 2.8% on the day. The chart below shows the one year performance of YUM shares, versus its 200 day moving average:
Looking at the chart above, YUM's low point in its 52 week range is $137.33 per share, with $170.14 as the 52 week high point — that compares with a last trade of $153.15. The YUM DMA information above was sourced from TechnicalAnalysisChannel.com
Click here to find out which 9 other stocks recently crossed below their 200 day moving average »
Further YUM Research:
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

YUM Makes Notable Cross Below Critical Moving Average

(RTTNews) - Tuesday, Pizza Hut, a part of Yum! Brands, Inc. (YUM), announced the debut of the new Throwback Value Menu, bringing together iconic Pizza Hut classics and new additions, all at a great value, starting July 14.
The new program, introduced as part of Hut Originals platform, allows fans to build their own Pizza Hut buffet with items starting at just $3. The offerings include two new menu items making their debut - $6 NEW Triple Cheese Mac and $5 NEW S'mores Sticks. Also, Pizza Hut is teaming up with Dinner Service NY, a brand known for transforming restaurant workwear into coveted streetwear.
The retailer has also invited fans the new "Back to the Hut" digital experience in the Hut Rewards app, where members can test their Pizza Hut knowledge through in-app trivia and challenges to unlock rewards, collectibles and exclusive experiences.
"From our collaboration with Dinner Service NY to the Back to the Hut experience, we're continuing to champion what makes Pizza Hut truly iconic," said Melissa Friebe, Chief Marketing Officer for Pizza Hut.
In the pre-market hours, YUM is trading at $161.42, down 0.14 percent on the New York Stock Exchange.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Pizza Hut Debuts Throwback Value Menu To Celebrate Iconic Menu Items

In the latest look at the underlying components of the S&P 500 ordered by largest market capitalization, Republic Services Inc (Symbol: RSG) has taken over the #246 spot from Yum! Brands Inc (Symbol: YUM), according to The Online Investor.
Market capitalization is an important data point for investors to keep an eye on, for various reasons. The most basic reason is that it gives a true comparison of the value attributed by the stock market to a given company's stock. Many beginning investors look at one stock trading at $10 and another trading at $20 and mistakenly think the latter company is worth twice as much — that of course is a completely meaningless comparison without knowing how many shares of each company exist. But comparing market capitalization (factoring in those share counts) creates a true "apples-to-apples" comparison of the value of two stocks. In the case of Republic Services Inc (Symbol: RSG), the market cap is now $67.44 billion, versus Yum! Brands Inc (Symbol: YUM) at $45.08 billion.
Below is a chart of Republic Services Inc versus Yum! Brands Inc plotting their respective size rank within the S&P 500 over time (RSG plotted in blue; YUM plotted in green):
Below is a three month price history chart comparing the stock performance of RSG vs. YUM:
Another reason market capitalization is important is where it places a company in terms of its size tier in relation to peers — much like the way a mid-size sedan is typically compared to other mid-size sedans (and not SUV's). This can have a direct impact on which mutual funds and ETFs are willing to own the stock. For instance, a mutual fund that is focused solely on Large Cap stocks may for example only be interested in those companies sized $10 billion or larger. Another illustrative example is the S&P MidCap index which essentially takes the S&P 500 index and "tosses out" the biggest 100 companies so as to focus solely on the 400 smaller "up-and-comers" (which in the right environment can outperform their larger rivals). So a company's market cap, especially in relation to other companies, carries great importance, and for this reason we at The Online Investor find value to putting together these rankings daily.
Examine the full RSG market cap history vs. the full YUM market cap history.
At the closing bell, RSG is up about 1.9%, while YUM is down about 1.1% on the day Monday.
Further RSG Research:
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Republic Services Now #246 Largest Company, Surpassing Yum! Brands

Starbucks Corporation’s SBUX shares have rallied 23.1% year to date, significantly outperforming the industry’s 1.9% growth. The strong momentum has pushed the stock close to its 52-week high of $108.88. Yesterday, Starbucks closed at $103.61, just 4.8% below that peak, reflecting growing investor confidence in its turnaround strategy.
Starbucks' recent rally reflects growing confidence in its turnaround strategy. The company posted its first year-over-year revenue and earnings growth in more than two years, raised the fiscal 2026 outlook and benefited from strong comparable sales, improving customer traffic, successful menu innovation and a stronger Starbucks Rewards program, reinforcing investor optimism.
Even among the top industry players, SBUX stands tall, outperforming McDonald's Corporation MCD, Chipotle Mexican Grill, Inc. CMG and Yum! Brands, Inc. YUM.
Price Performance
Image Source: Zacks Investment Research
Turnaround Strategy Is Delivering Results
One of the biggest catalysts behind Starbucks stock rally has been its return to revenue and earnings growth. During the second quarter of fiscal 2026, Starbucks reported year-over-year growth in both metrics for the first time in more than two years. Global comparable-store sales rose 6%, driven by more than 7% comparable sales growth in North America and strong transaction gains across all dayparts. Importantly, management noted that customer traffic reached its strongest level in three years, indicating that the company's operational improvements are encouraging consumers to visit more frequently.
The turnaround has been supported by the rollout of the Green Apron Service model, which focuses on better staffing, faster service and improved customer experience. Starbucks reported rising customer satisfaction scores while maintaining service speed despite handling higher transaction volumes. The company is also introducing scheduled mobile order pickup, which should improve convenience and throughput. These initiatives are helping restore Starbucks' premium customer experience while increasing store productivity.
Innovation and Loyalty Are Driving Demand
Starbucks continues to strengthen customer engagement through product innovation and an upgraded loyalty ecosystem. New beverage launches, including premium Matcha drinks, energy refreshers and seasonal offerings, have generated strong demand and expanded afternoon sales opportunities. The company also highlighted rapid growth in its Cold Foam platform and refreshers business, which continues to attract younger consumers.
At the same time, Starbucks Rewards has become a key growth engine. Active U.S. Rewards membership reached a record 35.6 million, while the redesigned program has increased customer engagement and visit frequency. Management noted that the new 60-star redemption option has quickly become the most popular reward, supporting repeat visits and reinforcing customer loyalty. These initiatives, combined with targeted marketing, have helped improve brand affinity to its highest level in five years.
International Momentum Adds Another Growth Avenue
The recovery is no longer limited to North America. Starbucks reported positive comparable sales across all 10 of its largest international markets for the first time in nine quarters. China recorded another quarter of transaction-led growth, while Japan and South Korea delivered particularly strong performances.
The recently completed partnership with Boyu Capital also positions Starbucks China for long-term expansion while reducing capital intensity. Management expects the new licensing structure to improve profitability and support faster expansion across more than 1,500 Chinese county-level cities over the next three years. The company also reaffirmed plans to open 600-650 net new stores globally in fiscal 2026, providing another growth catalyst.
What Could Slow the Rally?
Despite the encouraging progress, several risks could temper Starbucks stock’s momentum.
Management acknowledged that the macroeconomic environment remains uncertain. Although customer demand has remained resilient, executives cautioned that higher fuel prices and broader economic pressures could eventually weigh on consumer spending. Starbucks incorporated this uncertainty into its updated fiscal 2026 guidance, suggesting management remains cautious despite recent strength.
Margin pressures have not disappeared. Product and distribution costs remain elevated due to coffee inflation, tariffs and innovation-related expenses. While Starbucks expects these headwinds to ease in the second half of fiscal 2026, any rebound in commodity prices or prolonged tariff impacts could pressure profitability.
Sustaining the rally will require continued flawless execution of the "Back to Starbucks" strategy. The company is making significant investments in labor, technology and store upgrades, and investors will expect these investments to continue generating stronger traffic, higher comparable sales and expanding margins. Any slowdown in execution or a weakening of consumer demand could reduce enthusiasm for the turnaround.
SBUX’s Estimate Revision Trend
The Zacks Consensus Estimate for SBUX's fiscal 2026 and 2027 EPS moved up in the last 60 days, indicating positive sentiment among analysts for its earnings.
Image Source: Zacks Investment Research
Taking a Look at Starbucks’ Valuation
SBUX stock is trading below the industry. With a forward 12-month price/sales ratio of 2.98X, below its industry average. Meanwhile, other industry players like McDonald's, Chipotle Mexican Grill and Yum! Brands are trading at 6.85X, 3.23X and 4.96X, respectively.
P/S (F12M)
Image Source: Zacks Investment Research
End Notes
Starbucks is making meaningful progress in its turnaround, supported by improving operations, stronger customer engagement, successful product innovation and growing momentum across international markets. These factors, along with improving earnings expectations and a reasonable valuation, support a Hold stance for existing investors. However, with the stock trading close to its 52-week high after a strong rally, much of the near-term optimism appears to be reflected in the share price.
In addition, macroeconomic uncertainty, lingering cost pressures and the need for continued flawless execution of the "Back to Starbucks" strategy could limit further upside. As a result, existing investors may consider holding the stock to benefit from the ongoing turnaround, while new investors may be better served waiting for a more attractive entry point.
Starbucks currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Starbucks Near Its 52-Week High: Can the Stock Sustain the Rally?

Key Points
Domino’s trades near 16x earnings despite an asset-light, digitally driven delivery and takeout model.
Inflation, rival turmoil, and flexible promotions may shape Domino’s traffic, margins, and market share.
Is the market underestimating Domino's Pizza (NASDAQ: DPZ) at roughly 16x earnings, even as it leans on digital ordering, low prices, and smart promotions in an inflationary world? Watch the video below to see why conviction remains strong.
*This video was published on Jun. 17, 2026.
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Should you buy stock in Domino's Pizza right now?
Before you buy stock in Domino's Pizza, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Domino's Pizza wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,890!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,196,664!*
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Anthony Schiavone has positions in Starbucks. Jason Moser has positions in Starbucks. The Motley Fool has positions in and recommends Domino's Pizza and Starbucks. The Motley Fool recommends Yum! Brands. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Down About 16% and Trading at 16 Times Earnings, Is Domino's a Long-Term Buy Today?

McDonald’s Corporation MCD continues to position China as a long-term growth lever within its International Developmental Licensed (IDL) segment, even as near-term macroeconomic pressure remains a constraint. In the first quarter of 2026, IDL comparable sales increased 3.4%, driven by continued strength in Japan. While China remains challenged by softer consumer conditions, McDonald’s maintained market share and continued to advance its development agenda, with management reaffirming plans to open approximately 1,000 restaurants in the market this year.
The development commitment underscores management’s confidence in China’s long-term unit-growth potential. However, with macroeconomic pressure in China expected to persist, the benefit of new restaurant openings is more likely to support long-term system growth than provide an immediate offset to near-term IDL volatility.
The broader IDL outlook also remains uneven. McDonald’s expects second-quarter IDL comparable sales growth to decelerate from first-quarter levels, primarily due to volatility in the Middle East and some markets in Asia. Broader cost inflation and supply-chain uncertainty add another layer of pressure to the global operating backdrop.
Even so, McDonald’s retains several levers to defend segment performance. Its value focus, marketing scale and disciplined local execution should help support demand across international markets. China’s share stability points to sustained brand relevance despite weaker consumer conditions, while Japan’s continued strength provides a stabilizing factor for the segment.
Overall, China expansion is unlikely to fully offset near-term macro pressure across IDL markets. However, disciplined execution of the restaurant-opening plan, combined with continued share stability, could make China an important contributor to McDonald’s broader international growth strategy over time.
McDonald’s Competitive Position
Yum! Brands, Inc. YUM provides a relevant benchmark because it is also using franchise-led development and international scale to support growth in a volatile backdrop. In the first quarter of 2026, KFC opened 648 new stores, supported by a strong start in China and development across 45 countries. YUM also noted that the Middle East conflict has caused some uncertainty and short-term delays in select markets, but it does not expect a change to KFC’s development plans for the year.
Starbucks Corporation SBUX offers another China comparison, as it is shifting toward a licensed structure while pursuing transaction-led recovery. In the second quarter of fiscal 2026, Starbucks China delivered positive comps, supported by transaction growth of more than 2%. The company also plans to expand its China footprint from more than 1,000 county-level cities today to more than 1,500 over the next three years.
Against this backdrop, McDonald’s positioning depends on whether China unit growth can translate into sustained share stability and stronger long-term IDL performance. Yum! Brands is leaning on franchisee strength and development momentum, while Starbucks is using local partnership and transaction-led growth to support China expansion. McDonald’s differentiation lies in its ability to pair disciplined China development with value, marketing scale and brand relevance.
SBUX’s Price Performance, Valuation & Estimates
Shares of McDonald’s have declined 9.2% in the past year compared with the industry’s fall of 7.4%.
MCD’s One-Year Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, MCD trades at a forward price-to-sales (P/S) multiple of 6.43, above the industry’s average of 3.30.
MCD’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MCD’s 2026 earnings per share (EPS) implies a year-over-year increase of 6%. The EPS estimates for 2026 have remained unchanged in the past 30 days.
EPS Trend of MCD Stock
Image Source: Zacks Investment Research
MCD’s Zacks Rank
MCD stock currently has a Zacks Rank #4 (Sell).
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Can McDonald's China Expansion Support IDL Growth Amid Macro Pressure?

Key Points
Yum! Brands was seeing an improvement in sales even before announcing this sale.
Meanwhile, McDonald's is closing in on 50 straight years of dividend increases.
Investors should note a key difference in the business model of these two chains.
Yum! Brands (NYSE: YUM) just announced that it plans to sell its Pizza Hut franchise to LongRange Capital for $2.7 billion. Investors have long known Yum! Brands as the umbrella that includes KFC, Taco Bell, and Pizza Hut. Pizza Hut's performance has generally lagged that of the other franchises, and this was likely a factor in the decision to sell it.
One has to assume unloading a poorer-performing franchise should bode well for Yum! Brands shareholders. Still, one also might wonder how it compares to McDonald's (NYSE: MCD), which has built one of the more successful fast-food enterprises in existence. Let's take a closer look at both to see how the consumer discretionary stocks compare.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Putting Yum! Brands into perspective
At first glance, the Pizza Hut sale appears to be a positive for Yum! Brands. Its same-store sales declined in 2025 and were flat in the first quarter of 2026. This may seem disappointing considering that Pizza Hut is the second-largest of its four franchises, significantly lagging behind KFC but ahead of Taco Bell and Habit Burger.
Still, one might ask whether investors should be concerned by this move. Yum! Brands has thrived on being an umbrella for several well-known franchises. Even though it was not performing as well as other franchises in the company, Pizza Hut's longtime presence has made it one of the more respected pizza brands.
Moreover, Yum! Brands has appeared more prosperous recently despite Pizza Hut's performance. In Q1, it earned $2.06 billion in revenue, a 15% yearly increase. That was ahead of the 9% annual revenue surge in 2025. Also, Q1 net income rose 71% to $432 million as the company's tax burden fell.
Interestingly, in 2025, the $1.56 billion it earned in net income rose 5% yearly on a rise in its tax burden. That has helped support its dividend of $3.00 per share, a payout that has increased for nine straight years. Also, the 1.9% dividend yield is significantly above the S&P 500 average of 1.1%.
Nonetheless, Yum! stock has risen by around 10% over the past year. Amid that increase, it maintained a P/E ratio of around 24, just below its average of 26 over the last five years. If you believe spinning off Pizza Hut is a wise move, such numbers might persuade you to take a chance on Yum! Brands stock.
Why investors might consider McDonald's
When comparing Yum! Brands to McDonald's, investors have to realize that McDonald's is a fundamentally different business. For one, despite past ownership of Chipotle Mexican Grill and a recent attempt to start a beverage-based franchise, McDonald's is about one franchise.
Moreover, its business model has one surprising difference. Around 95% of McDonald's restaurants are franchises. McDonald's also owns the buildings, bringing added rental revenue from the franchises. Although that does not make McDonald's a real estate investment trust (REIT), it gives the company a more stable revenue base that depends less directly on restaurant sales.
Still, the company has faced criticism for rising prices. Big Mac meals as high as $18 left customers questioning whether McDonald's was still a value option. Also, its "under $3 deals" were not always a hit a few years ago.
However, what might be bad for customers has appeared to benefit investors. In the first quarter of 2026, its $6.5 billion in revenue rose 9% yearly, well above the 4% increase in 2025. Rising expenses, particularly taxes, meant its $2.0 billion in quarterly income climbed by just 6% annually, improving over the 4% income growth in 2025.
With regard to dividends, it pays shareholders $7.44 per share annually, or a yield of 2.7%. Investors should note that the dividend has risen for 49 straight years, one year short of the 50 years required for Dividend King status.
Despite that growth, the stock has struggled in recent months and is down slightly over the last year. Nonetheless, the 23 P/E ratio means its valuation is slightly below the five-year average of 27, a factor that could attract more investors to McDonald's stock.
Yum! Brands or McDonald's?
Despite the possible improvements for Yum! Brands that will come from the sale of Pizza Hut, investors are likely better off buying McDonald's stock.
Indeed, both are income-generating stocks backed by businesses with decades of history. However, McDonald's emphasis on a single franchise arguably gives it more focus. Additionally, the revenue from real estate ownership acts as a stabilizer that shields the company from economic cycles.
Furthermore, investors can buy McDonald's stock at a lower P/E ratio and earn a higher dividend yield. Hence, even if conditions improve for Yum! Brands stock, investors are likely to earn higher returns from McDonald's stock.
Should you buy stock in McDonald's right now?
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Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chipotle Mexican Grill. The Motley Fool recommends Yum! Brands and recommends the following options: long January 2028 $320 calls on McDonald's, short January 2028 $340 calls on McDonald's, and short June 2026 $36 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.