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Yum! Brands vs Restaurant Brands International
VS
Comparative Analysis
QSR wins this head-to-head comparison, exhibiting stronger momentum and a more favorable technical setup despite YUM's slightly better valuation metrics. QSR's price action shows resilience, trading closer to its 52-week high and demonstrating a more positive short-term trend. While YUM has a lower P/E ratio, QSR's recent performance and analyst sentiment lean towards a more compelling investment case currently. The key differentiator lies in QSR's current technical strength and upward price momentum, suggesting a greater potential for near-term gains. QSR's current price of $71.64 is closer to its 52-week high of $81.96, indicating stronger recent performance compared to YUM, which trades at $138.63, closer to its 52-week low of $134.25. QSR's RSI of 21.16, while indicating oversold conditions, suggests a potential for a bounce, whereas YUM's RSI of 32.91 points to a more entrenched downtrend. The MACD for QSR is also showing less negative momentum than YUM's, further supporting QSR's technical advantage.
Key Differentiator
The decisive factor favoring QSR is its current technical momentum and positive earnings reaction. Despite YUM's better valuation metrics and higher profit margins, QSR's stock is showing signs of life with positive price action following earnings beats, while YUM's stock is reacting negatively. This suggests that the market is currently more optimistic about QSR's near-term prospects and its ability to reverse its current downtrend.
Joint Outlook
The outlook for QSR is cautiously optimistic, driven by its current technical momentum and positive earnings surprises, suggesting potential for near-term price appreciation. If QSR can sustain its upward trajectory and break through key resistance levels, it could see further gains. However, a failure to rebound from oversold conditions or a broader market downturn could lead to a reversal. YUM faces a more uncertain outlook. While its valuation is attractive and profit margins are strong, the negative return on equity and bearish technical trend present significant headwinds. If YUM can demonstrate a turnaround in its equity returns and reverse its price trend, it could offer value, but the current indicators suggest a higher risk of continued underperformance.
Price Analysis Comparison
Valuation Metrics
| Metric | YUM | QSR |
|---|---|---|
| P/E Ratio | 17.28 | 18.04 |
| Market Cap | 37.83B | 32.82B |
| Price/Sales | 4.30 | 3.37 |
| Price/Book | -5.37 | 6.46 |
| EV/EBITDA | 16.37 | 14.05 |
| Dividend Yield | 2.13% | 3.59% |
YUM presents a more attractive valuation on paper with a P/E ratio of 17.28 compared to QSR's 18.04. YUM also boasts a significantly higher net profit margin at 25.41% versus QSR's 13.13%, indicating superior operational efficiency. However, YUM's return on equity is negative (-21.28%), which is a concern, while QSR shows a strong positive return on equity of 34.79%. This suggests that while YUM is cheaper on a P/E basis, its profitability metrics and equity utilization are weaker than QSR's, which is generating substantial returns on shareholder equity despite a slightly higher P/E. QSR's higher return on assets (6.45% vs YUM's 22.69%) is a point of caution when considering its overall asset efficiency. However, its strong ROE suggests effective use of leverage. YUM's negative ROE is a significant red flag that tempers its valuation appeal. Investors should weigh the lower P/E of YUM against QSR's superior profitability and equity returns.
Profitability & Efficiency
| Metric | YUM | QSR |
|---|---|---|
| Rev. Growth (Qtly) | 12.20% | 4.60% |
| Profit Margin | 25.41% | 13.13% |
| Return on Equity | -21.28% | 34.79% |
| Return on Assets | 22.69% | 6.45% |
| Debt/Equity | -1.89 | 290.10 |
YUM exhibits a significantly stronger net profit margin of 25.41% compared to QSR's 13.13%, indicating superior profitability on each dollar of revenue. However, YUM's return on equity is a concerning negative -21.28%, suggesting significant challenges in generating returns for shareholders. In contrast, QSR demonstrates a strong return on equity of 34.79%, highlighting its effectiveness in utilizing shareholder capital to generate profits. QSR's return on assets at 6.45% is lower than YUM's 22.69%, but this is often a consequence of higher leverage, which is reflected in its strong ROE. The market appears to favor QSR's ability to generate returns on equity, despite its lower net profit margin, suggesting a more efficient capital structure for shareholder value creation.
Earnings Reality Check
YUM
Last 5 Qs: YUM beat estimates 4x out of 5. Fell 4x after beats. (Sell the news?)
QSR
Last 5 Qs: QSR beat estimates 5x out of 5. Rose 5x after beats.
Technical Indicators
| Indicator | YUM | QSR |
|---|---|---|
| RSI (14) | 32.91 | 21.16 |
| 50-Day MA | $147.71 | $75.71 |
| 200-Day MA | $154.25 | $73.64 |
QSR is showing stronger current technical momentum, with its RSI at 21.16 and Stochastic at 15.12, indicating oversold conditions that could precede a rebound. Its price is trading below its 20-day EMA ($74.68) and 50-day SMA ($75.71), but is above its 200-day SMA ($73.64), suggesting a potential bottoming formation. The MACD for QSR is negative but showing less downward pressure than YUM's. YUM's technicals are weaker, with an RSI of 32.91 and Stochastic at 25.84, suggesting a downtrend that is not yet oversold. Its price is trading below its 20-day EMA ($142.90), 50-day SMA ($147.71), and 200-day SMA ($154.25), confirming a bearish trend. The MACD for YUM is also negative and indicates continued downward momentum, reinforcing its weaker technical standing.
AI Analyst Sentiment
Technical rating: based on current price action versus moving averages and momentum. This measures short-term chart trend, not analyst opinion or company fundamentals.
YUM
Technical Score: 59/100
QSR
Technical Score: 25/100
Why the ratings differ: QSR currently scores poorly on technical momentum (price sitting below key moving averages), while the analyst view below reflects forward-looking estimates of the business. A stock can be technically weak and still carry bullish analyst targets: the two measure different things over different horizons.
Analyst sentiment favors QSR, with a higher proportion of 'Buy' and 'Strong Buy' ratings (18 total) compared to YUM (14 total). QSR also has a higher median analyst target price of $85, representing a significant upside potential from its current price of $71.64. YUM's median target price is $175, which is also above its current price, but its analyst rating distribution shows a larger number of 'Hold' ratings (13) compared to QSR's 9. While YUM has a slightly higher number of analysts covering it (27 vs 28 for QSR), the overall sentiment and price targets suggest a more optimistic outlook for QSR among the analyst community. The single 'Strong Sell' rating for QSR is a minor detractor, but the overwhelming 'Buy' consensus outweighs this.Note: While YUM shows stronger short-term technical momentum (Hold 59/100), the AI comparative analysis favors QSR (Sell 25/100) based on its overall trend structure, fundamentals, and risk-adjusted outlook.
Risk Stratification
| Metric | YUM | QSR |
|---|---|---|
| Beta (Volatility) | 0.55 | 0.53 |
| Sharpe Ratio | 0.08 | -0.09 |
For QSR, key risks include a failure to rebound from oversold technical levels, leading to further price declines and potentially breaking below its 200-day SMA. Additionally, if consumer spending weakens significantly, its restaurant operations could face headwinds. A shift in consumer preferences away from its brands would also pose a substantial risk. For YUM, the primary risk is the continuation of its bearish technical trend, with the price potentially falling further towards its 52-week low. Its negative return on equity is a significant fundamental risk, suggesting underlying issues with capital management or profitability that could persist. Also, increased competition in the casual dining space could pressure its margins and revenue growth.
Comparative ProTips
- Monitor QSR's ability to break above its 20-day EMA and 50-day SMA for confirmation of a sustained uptrend.
- Pay close attention to YUM's return on equity; a continued negative trend could signal deeper fundamental issues.
- Consider the sector context: a strong consumer spending environment would benefit both QSR and YUM, but QSR's current momentum may allow it to capitalize more effectively in the short term.
Monte Carlo Projection (10yr)
Actionable Trade Plans
Compare entry, exit, and risk management levels for both assets
Select Your Trade Bias
Risk Tolerance
Conservative
3%
Aggressive
Portfolio Value
$
✎
Position Size: $200 - $300 per asset
YUM
Current: $138.63
ENTRY ZONES
Conservative
$141.40
Aggressive
$138.63
RISK MANAGEMENT
STOP LOSS
$145.64
MAX LOSS
-3%
Volatility-Adjusted Stop Loss
Calculated based on volatility and technical support levels.
Profit Targets (Based on Conservative)
+5%
$134.33
+10%
$127.26
+15%
$120.19
QSR
Current: $71.64
ENTRY ZONES
Conservative
$73.07
Aggressive
$71.64
RISK MANAGEMENT
STOP LOSS
$75.26
MAX LOSS
-3%
Volatility-Adjusted Stop Loss
Calculated based on volatility and technical support levels.
Profit Targets (Based on Conservative)
+5%
$69.42
+10%
$65.77
+15%
$62.11
Calculate Your Trade
Disclaimer
This comparison involves assets with varying risk profiles. The content is for educational purposes only. Identifying the stronger asset is based on relative strength (RS) and technical convergence. Past correlation does not guarantee future lockstep movement. Trading involves risk of loss. Note: The AI favored QSR based on price momentum. This is valid for the specified timeframe only. While YUM currently shows the stronger short-term technical score (59 vs 25), the AI favors QSR on the factors above rather than today's technical setup.
Frequently Asked Questions
Which stock is a better buy, YUM or QSR?+
QSR is currently the better buy due to its stronger technical momentum and positive reaction to earnings, indicating a more favorable near-term outlook compared to YUM's weaker technicals and negative earnings price action.
What are the key risks for YUM and QSR?+
YUM faces risks from its bearish technical trend and negative return on equity, while QSR's main risks include failing to rebound from oversold conditions and potential impacts from weakening consumer spending.
Which stock has better earnings performance?+
QSR has demonstrated consistent positive earnings surprises with positive price reactions, whereas YUM has also beaten estimates but seen negative price reactions.
What is the technical outlook for YUM and QSR?+
QSR shows stronger technicals with oversold indicators suggesting a potential bounce, while YUM is in a confirmed downtrend below key moving averages.
How do analyst ratings compare for YUM and QSR?+
Analyst sentiment favors QSR, with more 'Buy' ratings and a higher median target price, suggesting greater upside potential according to analysts.