Yum Authorizes Huge Share Repurchase Plan

By Chris Lange Updated Jan 13, 7:41AM EST · Published May 23, 11:55AM EDT

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Yum Authorizes Huge Share Repurchase Plan — © Thinkstock

Yum! Brands Inc. (NYSE: YUM) recently announced that its board of directors has approved a significant share repurchase plan for 2016. The board authorized a repurchase program up to $4.2 billion in additional shares of common stock, while also announcing a quarterly dividend of $0.46 per share.

The additional share repurchases are part of the company’s previously announced commitment to returning $6.2 billion of capital to shareholders prior to the planned separation of its China business, which is on track to be completed by the end of 2016. The capital will be returned in the form of share repurchases, a special dividend or a combination of the two.

From October 2015 through May 19, 2016, Yum repurchased 27.6 million shares of common stock totaling roughly $2 billion at an average price of $72 per share. The $4.2 billion in additional share repurchases of outstanding common stock is authorized through the end of 2016 and supersedes all previous unutilized authorizations. Repurchases of common stock may be made from time to time in the open market or through privately negotiated transactions and will be subject to market conditions and other factors.

The quarterly dividend is in addition to the targeted $6.2 billion in return of capital and will be distributed August 5, to shareholders of record at the close of business on July 15.
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Greg Creed, CEO of Yum, commented:

Today’s announcement marks another step towards our goal of delivering meaningful cash returns and demonstrates the commitment of our Board and management team to creating shareholder value. Our capital return plans reflect our continued confidence in our long-term growth prospects as we move towards the separation of our China business, which will result in two distinct and attractive investment opportunities for all of our shareholders.

Shares of Yum were trading at $79.94 Monday morning, with a consensus analyst price target of $85.42 and a 52-week trading range of $64.58 to $93.33.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.