DCF Tool

YUM

Yum Brands Inc. – Food Service Contractors
Yum! Brands, Inc., based in Louisville, Kentucky, has over 50,000 restaurants in more than 150 countries and territories primarily operating the Company's KFC, Pizza Hut, and Taco Bell brands - global leaders of the chicken, pizza, and Mexican-style food categories. The Company's family of brands also includes The Habit Burger Grill, a fast-casual restaurant concept specializing in made-to-order chargrilled burgers, sandwiches and more. In 2019, Yum! Brands was named to the Dow Jones Sustainability North America Index and in 2020, the company ranked among the top 100 Best Corporate Citizens by 3BL Media.
Analysis Results
Intrinsic Value $144.36
Latest Price $117.76
Relative Value 18% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 5.9%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.9%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 5.9%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 1.85 1.73
2023 1.96 1.72
2024 2.08 1.7
2025 2.2 1.69
2026 2.33 1.67
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 48.7 billion. This corresponds to a present value of 32.6 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 8.52 billion. Adding in the terminal value gives a total present value of 41.2 billion.

There are presently 285.0 million outstanding shares, so the intrinsic value per share is 144.36.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 1,532,000,000
Current Cash 486,000,000
Current Liabilities 1,415,000,000
Current Debt 68,000,000
Non-Cash Working Capital (NCWC) -301,000,000
Change in NCWC -38,000,000
EBIT 2,106,000,000
Tax Provision 99,000,000
Depreciation and Amortization 164,000,000
Capital Expenditure -230,000,000
Unlevered Free Cash Flow 1,877,451,612
Current Assets 1,689,000,000
Current Cash 730,000,000
Current Liabilities 1,675,000,000
Current Debt 453,000,000
Non-Cash Working Capital (NCWC) -263,000,000
Change in NCWC -75,000,000
EBIT 1,623,000,000
Tax Provision 116,000,000
Depreciation and Amortization 146,000,000
Capital Expenditure -160,000,000
Unlevered Free Cash Flow 1,349,423,529
Current Assets 1,527,000,000
Current Cash 605,000,000
Current Liabilities 1,541,000,000
Current Debt 431,000,000
Non-Cash Working Capital (NCWC) -188,000,000
Change in NCWC -123,000,000
EBIT 1,897,000,000
Tax Provision 79,000,000
Depreciation and Amortization 112,000,000
Capital Expenditure -196,000,000
Unlevered Free Cash Flow 1,580,849,963
Current Assets 1,207,000,000
Current Cash 292,000,000
Current Liabilities 1,301,000,000
Current Debt 321,000,000
Non-Cash Working Capital (NCWC) -65,000,000
Change in NCWC 87,000,000
EBIT 1,763,000,000
Tax Provision 297,000,000
Depreciation and Amortization 137,000,000
Capital Expenditure -234,000,000
Unlevered Free Cash Flow 1,468,274,061
Current Assets 2,507,000,000
Current Cash 1,522,000,000
Current Liabilities 1,512,000,000
Current Debt 375,000,000
Non-Cash Working Capital (NCWC) -152,000,000
Change in NCWC 373,000,000
EBIT 1,688,000,000
Tax Provision 934,000,000
Depreciation and Amortization 253,000,000
Capital Expenditure -318,000,000
Unlevered Free Cash Flow 1,302,687,774
Current Assets 1,482,000,000
Current Cash 704,000,000
Current Liabilities 1,369,000,000
Current Debt 66,000,000
Non-Cash Working Capital (NCWC) -525,000,000
Change in NCWC 689,000,000
EBIT 1,505,000,000
Tax Provision 324,000,000
Depreciation and Amortization 309,000,000
Capital Expenditure -422,000,000
Unlevered Free Cash Flow 1,711,030,349
Current Assets 1,688,000,000
Current Cash 737,000,000
Current Liabilities 3,088,000,000
Current Debt 923,000,000
Non-Cash Working Capital (NCWC) -1,214,000,000
Change in NCWC -138,000,000
EBIT 2,041,000,000
Tax Provision 489,000,000
Depreciation and Amortization 747,000,000
Capital Expenditure -973,000,000
Unlevered Free Cash Flow 1,118,494,683
Current Assets 1,646,000,000
Current Cash 578,000,000
Current Liabilities 2,411,000,000
Current Debt 267,000,000
Non-Cash Working Capital (NCWC) -1,076,000,000
Change in NCWC 0
EBIT 2,081,000,000
Tax Provision 406,000,000
Depreciation and Amortization 739,000,000
Capital Expenditure -1,033,000,000
Unlevered Free Cash Flow 1,194,928,521
Current Assets 1,691,000,000
Current Cash 573,000,000
Current Liabilities 2,265,000,000
Current Debt 71,000,000
Non-Cash Working Capital (NCWC) -1,076,000,000
Change in NCWC -31,000,000
EBIT 2,039,000,000
Tax Provision 487,000,000
Depreciation and Amortization 721,000,000
Capital Expenditure -1,049,000,000
Unlevered Free Cash Flow 1,039,772,404
Current Assets 1,909,000,000
Current Cash 776,000,000
Current Liabilities 2,188,000,000
Current Debt 10,000,000
Non-Cash Working Capital (NCWC) -1,045,000,000
Change in NCWC -38,000,000
EBIT 2,185,000,000
Tax Provision 537,000,000
Depreciation and Amortization 645,000,000
Capital Expenditure -1,099,000,000
Unlevered Free Cash Flow 1,145,986,013

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