YUM Analysis: Yum! Brands Trades Within 1% of Its 52-Week High as the KFC-Taco Bell-Pizza Hut Franchise Empire Prints $1.6 Billion in Free Cash Flow
Yum! Brands (NYSE: YUM) is having a quiet but emphatic run. The parent company of KFC, Taco Bell, Pizza Hut, and The Habit Burger Grill closed at $163.33 on February 21, 2026 — less than 1.2% below its 52-week high of $165.32 and a full 19% above its 52-week low of $137.33. With a market capitalization of $45.3 billion, YUM is one of the most valuable restaurant companies on Earth, trailing only McDonald's and Starbucks among publicly traded quick-service restaurant (QSR) operators. The stock's surge toward new highs comes on the heels of a strong fiscal 2025 that saw full-year revenue climb to approximately $8.21 billion, free cash flow hit $1.64 billion, and Q4 revenue reach $2.51 billion — the strongest quarter of the year. For a company that operates primarily through franchisees rather than company-owned restaurants, YUM's ability to generate consistent cash flow from royalty streams and franchise fees makes it a capital-light compounder in a sector known for tight margins. But at nearly 30x trailing earnings with negative book value and over $12 billion in debt, YUM demands scrutiny. Is the franchise model's cash generation enough to justify the premium? And with McDonald's competing head-to-head in key growth markets like India, can YUM maintain its momentum?