YUM
Yum! Brands, Inc.
Consumer Cyclical · Restaurants · United States · Stock
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- Profitability is a clear strength, with a 31.3% operating margin and 19.0% return on assets in FY2025 earning a near-maximum profitability score.
- Dividend consistency and a balanced 50.6% payout ratio contributed positively, while the negative debt-to-equity ratio of -1.62 weighed on the financial health component.
- The absence of a macro theme assignment means no theme-based score contribution is available, which alongside moderate rather than exceptional growth rates kept the total at 63.1/100.
Why Not Higher
- The negative debt-to-equity ratio of -1.62 and interest coverage of only 4.7x in FY2025 resulted in a middling financial health score that limited the composite.
- Revenue and earnings growth rates of 8.8% and 4.9% respectively in FY2025, while positive, were assessed as moderate rather than exceptional, placing YUM in the middle tier of the growth assessment.
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2024's $7,549,000,000 to FY2025's $8,214,000,000 (+8.8%), while net income rose from FY2024's $1,486,000,000 to FY2025's $1,559,000,000 (+4.9%), and diluted EPS increased from FY2024's $5.22 to FY2025's $5.55 (+6.3%).
The model recognized positive growth across revenue, net income, and EPS from FY2024 to FY2025, but the mid-range score suggests the rates of growth were moderate rather than exceptional, placing YUM in the middle tier of the model's growth assessment.
In FY2025, Yum! Brands posted an operating margin of 31.3%, a net margin of 19.0%, and a return on assets of 19.0%.
These figures reflect a highly efficient, asset-light franchise model, and the model rewarded the combination of a very high operating margin, solid net margin, and strong return on assets with a near-maximum profitability score.
In FY2025, Yum! Brands carried a debt-to-equity ratio of -1.62, an interest coverage ratio of 4.7, and total assets of $8,197,000,000.
The negative debt-to-equity ratio reflects a technically insolvent equity position driven by accumulated buybacks and franchise-model leverage, which the model penalized despite adequate interest coverage of 4.7x in FY2025, resulting in a middling financial health score.
Over the last four reported quarters, revenue moved from $1,933,000,000 in 2025Q2 to $1,979,000,000 in 2025Q3, peaked at $2,515,000,000 in 2025Q4, then moderated to $2,059,000,000 in 2026Q1; operating income followed a similar arc of $622,000,000, $666,000,000, $738,000,000, and $644,000,000 across the same periods.
The model observed a generally upward trend through 2025Q4 followed by a pullback in 2026Q1, suggesting solid but not uniformly accelerating momentum, which the model rewarded with an above-average but not top-tier score.
Yum! Brands has grown its dividends per share each year from $2.28 in FY2022 to $2.42 in FY2023, $2.68 in FY2024, and $2.84 in FY2025, while maintaining a dividend payout ratio of 50.6% of net income in FY2025.
The model rewarded the consistent multi-year dividend growth trend and a balanced payout ratio that signals both shareholder returns and retained earnings capacity, supporting a strong but not maximum dividend score.
Yum! Brands is not currently assigned to any of the 24 tracked macro themes in the model.
The absence of a theme assignment is a neutral characteristic of the model's current coverage rather than a reflection of the company's business quality; without a theme assignment, no theme-based score contribution is available under the model's current methodology.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Yum! Brands delivered moderate but consistent growth in FY2025, with revenue rising 8.8% to $8,214,000,000 and diluted EPS increasing 6.3% to $5.55, supported by an exceptionally efficient franchise model that generated a 31.3% operating margin and 19.0% return on assets. The company's financial health is complicated by a negative debt-to-equity ratio of -1.62, reflecting accumulated share buybacks and franchise-model leverage, though interest coverage of 4.7x remains adequate. Dividend growth has been steady, with dividends per share rising from $2.28 in FY2022 to $2.84 in FY2025 at a balanced payout ratio of 50.6%. The composite score of 63.1/100 with a Medium risk rating reflects the interplay of strong profitability and dividend consistency against leverage concerns and the absence of a macro theme assignment.
Plain English
Yum! Brands is a highly profitable fast-food franchisor that grew its revenue and earnings in FY2025 and keeps raising its dividend every year, but it carries a lot of debt relative to its equity, which adds some financial risk and keeps its overall score in the middle range.
Bull Case vs. Bear Case
Bull Case
- Yum! Brands operates an asset-light franchise model that produced a 31.3% operating margin and 19.0% net margin in FY2025, reflecting exceptional capital efficiency.
- The company has grown dividends per share every year from $2.28 in FY2022 to $2.84 in FY2025, with a balanced payout ratio of 50.6% that leaves room for retained earnings.
- Revenue grew 8.8% year-over-year to $8,214,000,000 in FY2025, and quarterly operating income trended upward through 2025Q4, signaling solid underlying business momentum.
Bear Case
- The debt-to-equity ratio of -1.62 in FY2025 signals a technically insolvent equity position driven by buybacks and leverage, which the model penalized in its financial health assessment.
- Interest coverage of only 4.7x in FY2025 leaves limited buffer if operating income were to decline, making the balance sheet a meaningful risk factor.
- Yum! Brands is not assigned to any of the 24 tracked macro themes, meaning it receives no theme-based score contribution under the model's current methodology.
What Could Change the Picture
Bullish Triggers
- A sustained acceleration in revenue and earnings growth beyond the moderate FY2025 rates of 8.8% and 4.9% respectively could push the growth score meaningfully higher.
- Meaningful deleveraging that moves the debt-to-equity ratio toward positive territory would address the primary financial health concern and could improve the composite score.
Bearish Triggers
- A reversal of the dividend growth trend or a payout ratio that rises well above the current 50.6% could signal financial stress and reduce confidence in capital allocation.
- A continuation of the 2026Q1 revenue and operating income pullback from the 2025Q4 peak could indicate decelerating momentum and weigh on future scores.
Risk Profile
Medium RiskThe primary financial risk is Yum! Brands' negative debt-to-equity ratio of -1.62 in FY2025, which reflects a technically insolvent equity position from accumulated buybacks and franchise leverage; while interest coverage of 4.7x is adequate, it provides a limited cushion. Quarterly momentum showed a pullback in 2026Q1 operating income to $644,000,000 from a peak of $738,000,000 in 2025Q4, introducing some uncertainty about near-term trajectory.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.