Yum China Holdings Inc's Dividend Analysis
Assessing the Upcoming Dividend and Historical Performance of YUMC
Yum China Holdings Inc (NYSE:YUMC) recently announced a dividend of $0.16 per share, payable on 2024-03-26, with the ex-dividend date set for 2024-03-04. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Yum China Holdings Inc's dividend performance and assess its sustainability.
What Does Yum China Holdings Inc Do?
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With almost 13,000 units and USD 10 billion in systemwide sales in 2022, Yum China is the largest restaurant chain in China. It generates revenue through its own restaurants and franchise fees. Key concepts include KFC (9,094 units) and Pizza Hut (2,903), but the company's portfolio also includes other brands such as Little Sheep, East Dawning, Taco Bell, Huang Ji Huang, COFFii & Joy, and Lavazza (collectively representing about 950 units). Yum China is a trademark licensee of Yum Brands, paying 3% of total systemwide sales to the company it separated from in October 2016.
A Glimpse at Yum China Holdings Inc's Dividend History
Yum China Holdings Inc has maintained a consistent dividend payment record since 2017. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Yum China Holdings Inc's Dividend Yield and Growth
As of today, Yum China Holdings Inc currently has a 12-month trailing dividend yield of 1.21% and a 12-month forward dividend yield of 1.49%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Yum China Holdings Inc's annual dividend growth rate was 29.40%. Extended to a five-year horizon, this rate decreased to 5.20% per year. Based on Yum China Holdings Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Yum China Holdings Inc stock as of today is approximately 1.56%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Yum China Holdings Inc's dividend payout ratio is 0.26.