YUM is next up to report. I’d sell this thing before it reports tonight. Here’s why: it’s got a 13% growth rate and sells at almost 20x.  They have 37,000 restaurants, mixed between franchises and company owned. That makes YUM the largest Quick Serve Restaurant in the world measured by restaurant count (not revenue). For all these locations, the are doing about $2.5B in revenue in a normal quarter and $3.5B in the Christmas season. It yields 1.8%.

Let’s compare that with MCD (which has been on fire for 6 months). It’s got a 9% growth rate and sells for about 17x. MCD has 32,500 restaurants and generates about $6B in revenue every quarter. That also makes MCD the largest Quick Serve Restaurant in the world measured by revenue (not restaurant count). That is about double the revenue per location that YUM has. MCD yields about 2.8%.

The growth rates are similar. The P/Es are similar. The yields are not. I would sell YUM before the quarter as it will have to be a good quarter and really beat expectations of $0.61 eps on $2.7B revenue. The estimates have been coming down in the past 90 days, but the stock has not. It’s just off a 52 week high. The estimates for AA came down a couple cents in the days before it reported, but the stock had been down a lot, so lowered expectations were met, and it’s stabilizing now. YUM does not have the same tailwind going for it. I don’t know where YUM falls in to the QSR group, if I want growth, I’ve got CMG. If I want steady dividend, I’ve got MCD. I have no idea what YUM is because it’s somewhere in between.