Out Fox The $treet

Yum Brands recently announced a huge increase to the capital return plan. The details of the stock repurchase plan are highly misleading considering the purchases of stock prior to the split of the Yum China business. Once the split takes place, yield investors can better evaluate the deal offered to investors. In the midst of plans to split the China business into a separate company,  Yum Brands (NYSE: YUM )  plans massive capital returns to shareholders. Unlike other typical large-scale capital return plans, the stock actually trades near all-time highs. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details.

On several occasions it has been pointed out that Domino's Pizza (DPZ) has one of the largest global restaurant operations in India including this recent mention on Mad Money with Jim Cramer. As Cramer points out, Domino's might provide the investment option into India that Yum Brands (YUM) provided with China. With fast growth ahead for decades and limited investable stocks in the US, any stock with a large percentage of revenue from India could be very attractive to the markets. One thing to remember is that although India provides huge growth opportunities, the economic base is much smaller than China and especially the US. So could any large U.S.-based retailer actually derive enough sales from India to make a difference? Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details.

After the bell today, Yum! Brands (YUM) reported decent earnings. It's selling off slightly after hours because the guidance isn't as high as hoped but it's still very respectable. Only day traders would sell on this news. Commodity prices will clearly hurt them if they continue to rocket higher. More importantly though is the Net Payout Yield. During the quarter, YUM hiked the dividend from $.21 to $.25 and bought back $283M worth of stock. No mention of the price paid so hopefully it was all during July when the stock was much lower. Annualized yield now jumps to over 4% and if you take the Q3 buyback numbers only it jumps to over 6%. The yield is definitely more attractive now then in the recent past, but its concerning that the stock price is already at 52 week highs reducing the likelihood of follow through on the buyback. For now, Stone Fox will leave the position in YUM to roughly 2% of the Net Payout Yield Portfolio. The Q3 numbers remain impressive, but the val...

Yum Brands (YUM) has been a desirable investment over the last few years because of its presence in China with KFC. As of September 30th, YUM caught our attention as a potential Net Payout Yield stock. On that day, YUM announced a 11% dividend increase and a $300M buyback. Anybody following our Net Payout Portfolio knows that we love stocks that generate plenty of cash to make dividends and buybacks. With a market cap of over $16B, the buyback is only roughly 2% so not too impressive. Combined with the 2.4% dividend YUM is getting close to a 5% net payout. Somewhat below average but not too bad for a company forecasting 12% profit growth this year. Considering the buyback was higher in 2008, its also possible they'll up the buyback amount as the recovery takes hold. Considering that YUM provides the unique opportunity of a decent Net Payout Yield and access to the growth of the Chinese consumer this is an ideal candidate for both our Growth and Net Payout Yield Portfolios. With a...