After the closing bell on Wednesday, Yum! Brands (YUM) posted a net loss for the fourth quarter. Here’s what the results mean for mutual fund investors.
Inside the Results
Earnings
The company posted a net loss of $86 million, or 20 cents per share, compared to net income of $321 million, or 70 cents per share, last year. Excluding special items, EPS was 61 cents – lower than analysts’ estimate of 66 cents.
Revenue
Sales fell 4% to $4.00 billion from $4.18 billion, last year. Analysts expected to see $3.97 billion in revenue.
The Struggles in China
While YUM has been attempting to dominate overseas markets like China, its bottom line has been negatively impacted by the region. If the company is able to improve its execution in China, it is likely that its numbers will improve.
From a valuation standpoint, YUM is trading at 20x 2015 earnings estimates, which is fairly attractive. The company also offers an attractive dividend yield of about 2.20% and has had a history of significant dividend increases.
Mutual Funds to Watch
Investors interested in YUM may also consider a mutual fund as an alternative to owning the individual stock. The funds below currently hold the largest stakes in YUM.
| Symbol | Mutual Fund | Stake |
|---|---|---|
| VTSMX | Vanguard Total Stock Index Fund | 1.68% |
| VFINX | Vanguard 500 Index | 1.08% |
| TGVAX | Thornburg International Value | 0.52% |
The Bottom Line
The funds above are a great way for investors to gain exposure to a diverse bundle of securities and industries. Investors interested in YUM may also be interested in Brinker International (EAT).