Better Buy: McDonald's or Yum! Brands After Selling Pizza Hut for $2.7 Billion?

Yum! Brands (NYSE: YUM) conscionable announced that it plans to merchantability its Pizza Hut franchise to LongRange Capital for $2.7 billion. Investors person agelong known Yum! Brands arsenic the umbrella that includes KFC, Taco Bell, and Pizza Hut. Pizza Hut's show has mostly lagged that of the different franchises, and this was apt a origin successful the determination to merchantability it.

One has to presume unloading a poorer-performing franchise should bode good for Yum! Brands shareholders. Still, 1 besides mightiness wonderment however it compares to McDonald's (NYSE: MCD), which has built 1 of the much palmy fast-food enterprises successful existence. Let's instrumentality a person look astatine some to spot however the user discretionary stocks compare.

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Putting Yum! Brands into position

At archetypal glance, the Pizza Hut merchantability appears to beryllium a affirmative for Yum! Brands. Its same-store income declined successful 2025 and were level successful the archetypal 4th of 2026. This whitethorn look disappointing considering that Pizza Hut is the second-largest of its 4 franchises, importantly lagging down KFC but up of Taco Bell and Habit Burger.

Still, 1 mightiness inquire whether investors should beryllium acrophobic by this move. Yum! Brands has thrived connected being an umbrella for respective well-known franchises. Even though it was not performing arsenic good arsenic different franchises successful the company, Pizza Hut's longtime beingness has made it 1 of the much respected pizza brands.

Moreover, Yum! Brands has appeared much prosperous precocious contempt Pizza Hut's performance. In Q1, it earned $2.06 cardinal successful revenue, a 15% yearly increase. That was up of the 9% yearly gross surge successful 2025. Also, Q1 nett income roseate 71% to $432 cardinal arsenic the company's taxation load fell.

Interestingly, successful 2025, the $1.56 cardinal it earned successful nett income roseate 5% yearly connected a rise successful its taxation burden. That has helped enactment its dividend of $3.00 per share, a payout that has accrued for 9 consecutive years. Also, the 1.9% dividend output is importantly supra the S&P 500 average of 1.1%.

Nonetheless, Yum! banal has risen by astir 10% implicit the past year. Amid that increase, it maintained a P/E ratio of astir 24, conscionable beneath its mean of 26 implicit the past 5 years. If you judge spinning disconnected Pizza Hut is simply a omniscient move, specified numbers mightiness transportation you to instrumentality a accidental connected Yum! Brands stock.