Yum Brands (NYSE:YUM) is an American fast food corporation that operates popular brands like Taco Bell, Pizza Hut, KFC, and Wing Street.
Its stock has dropped 3.5% over the past week as of close on February 10. Shares have plunged following the release of its fourth quarter and full-year results for 2019.
In those results, Yum Brands missed Wall Street estimates. However, it did exceed expectations by posting 9% growth in net sales to $1.69 billion.
Taco Bell and KFC led the way in the quarter, reporting same-store sales growth of 4% and 3%, respectively. Following a trend, Pizza Hut lagged and posted same-store sales growth of 2%. In January the company announced that it would add Habit Restaurants to its stable of fast food stores.
There are concerns that Yum China will take a major hit due to the outbreak of the coronavirus in Wuhan and other major cities. The company warned that the outbreak will "materially affect" its 2020 results.
Yum China has rolled out "contactless delivery", which allows customers to pick up food without engaging with employees.
Yum Brands stock possesses a price-to-earnings value of 24, which is solid value relative to industry peers. However, its dividend track record has been shaky, and its debt remains a concern going forward.
This, combined with the unfolding crisis in China, makes me stray away from Yum Brands as a potential buy-the-dip candidate.
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