Not Cheap Enough to Be Finger-Lickin' Good
Shares of restaurant giant Yum! Brands (YUM) have pulled back about 11% from their 2012 high of $74.44. Management just raised the dividend by 17.5% to an annual rate of $1.34 per share, and 2012 earnings per share are expected to come in at an all-time record of $3.26.
That all sounds like great news. Why then, do I recommend waiting to buy? The answer is valuation. This year's high represented the stock's most overpriced price-to-earnings ratio ever. Yum! Brands then traded at almost 25x trailing earnings, and it offered the second-worst dividend yield since 2008....272 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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