Topic: Growth Stocks

Wall Street Stock Forecaster Hotline – Friday, October 23, 2015

Article Excerpt

YUM! BRANDS INC., $72.89, New York symbol YUM, plans to spin off its operations in China as a separate firm. The company will hand out shares in Yum China to its own investors, who will not be liable for capital gains taxes until they sell. The company aims to complete the spinoff by the end of 2016. Yum China will operate 6,900 fast-food outlets under the KFC, Pizza Hut and Taco Bell banners. In the three months ended September 5, 2015, this division supplied 57% of Yum’s overall sales. The remaining company will consist of 35,000 restaurants outside China and plans to have franchisees running 95% of them by the end of 2017. Yum Brands will also earn licensing revenue from Yum China. Studies have shown that after an initial adjustment period of a few months, spinoffs tend to outperform groups of comparable stocks for several years. However, the Chinese operations are still recovering from a food-safety scare in 2014. Yum Brands is still a..