Fast food operators ready for next phase

Article Excerpt

Shares of these two fast-food companies have held up well during the pandemic. That’s thanks in part to their already well-established takeout and delivery services. New menu items and smaller, less costly restaurants also set them for more gains. YUM! BRANDS INC. $102 remains a buy. The company (New York symbol YUM; Aggressive Growth Portfolio; Consumer sector; Shares outstanding: 301.7 million; Market cap: $30.8 billion; P.S. ratio: 5.5; Dividend yield: 1.8%; TSINetwork Rating: Average; www.yum.com) operates roughly 50,000 restaurants in over 140 countries. Its main restaurant banners are KFC (fried chicken), Pizza Hut and Taco Bell (Mexican food). Franchisees operate 98% of those stores. Yum has now re-opened most of its stores in the wake of last spring’s COVID-19 shutdowns. As a result, sales in the third quarter of 2020 rose 8.1%, to $1.45 billion from $1.34 billion a year earlier. On a same-store basis, sales fell 2%. That reflects declines at KFC (down 4%) and Pizza Hut (down 3%), which were only partly offset…