YUM! BRANDS INC. $34 (New York symbol YUM; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 469.3 million; Market cap: $16.0 billion; Price-to-sales ratio: 1.5; Dividend yield: 2.5%; WSSF Rating: Average) operates over 37,000 restaurants in more than 110 countries. It has five main banners: KFC (fried chicken), Pizza Hut, Taco Bell (Mexican food), A&W (hamburgers) and Long John Silver’s (seafood).

Yum’s sales rose 20.6%, from $9.3 billion in 2005 to $11.3 billion in 2008. In 2009, sales fell 4.1%, to $10.8 billion. That’s mainly because of the negative impact of exchange rates. If you exclude exchange rates, sales would have risen by 1%. Same-store sales in 2009 fell 1% in China and 5% in the U.S., but rose 1% in Yum’s other overseas markets.

Earnings rose 40.6%, from $762 million in 2005 to $1.1 billion in 2009. Earnings per share rose 73.4%, from $1.28 in 2005 to $2.22 in 2009, on fewer shares outstanding. If you exclude unusual items, per-share earnings would have risen 70.9%, from $1.27 in 2005 to $2.17 in 2009.

Like McDonald’s, Yum’s recent growth has mainly come from rising sales in overseas markets. China is Yum’s main international market. The Chinese division, which mainly consists of KFC outlets, accounted for 35% of Yum’s 2009 sales and earnings. That’s up from 25% in 2008. Yum’s U.S. restaurants supplied 40% of its 2009 sales, and 37% of earnings. Its other international operations, excluding China, accounted for 25% of its sales and 28% of its earnings.

More international expansion in 2010

The company plans to open 1,400 new restaurants outside of the U.S. this year. It opened 1,467 international outlets in 2009, including 509 restaurants in China and 898 in other countries.

Yum’s $3.2 billion of long-term debt is just 20% of its market cap, so it can easily borrow more to finance these new restaurants. It holds cash of $353 million, or $0.75 a share.

The stock trades at 14.2 times Yum’s likely 2010 earnings of $2.39 a share.

Yum Brands is a buy.