Zacks Bull and Bear of the Day Highlights: Expedia, Gerdau S.A., Yum! Brands, Frisch’s Restaurants and Brinker International
CHICAGO, Sept. 16, 2011 /PRNewswire/ -- Zacks Equity Research highlights Expedia, Inc. (Nasdaq: EXPE) as the Bull of the Day and Gerdau S.A. (NYSE: GGB) as the Bear of the Day. In addition, Zacks Equity Research provides analysis Yum! Brands Inc. (NYSE: YUM), Frisch's Restaurants Inc. (AMEX: FRS) and Brinker International Inc. (NYSE: EAT).
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Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Expedia, Inc. (Nasdaq: EXPE), one of the leading online travel companies in the world, solidly beat the Zacks Consensus Estimate in the second quarter, despite higher expenses. A stronger economy, increased travel spending by both individuals and corporations and international expansion are driving results.
Additionally, Egencia is turning around, posting strong results in the last quarter. The solid growth strategy across markets and stronger business fundamentals overall are the reasons for our Outperform recommendation.
The shares also appear cheap since they are trading at a forward P/E of 16.5X compared to a 52.2X multiple for the peer group. Our $36.00 target price, 20.0X 2011 EPS, reflects our favorable view.
Brazilian steelmaker Gerdau S.A.'s (NYSE: GGB) second quarter results were rather disappointing as the company's EPS of $0.18 plummeted 38% year over year and lagged behind the Zacks Consensus by 14 cents. Results were plagued by higher raw material costs that have been persistently affecting the company's financial health.
To add to the peril, Gerdau's positive momentum gets restricted by the headwinds arising from foreign currency fluctuation, cyclicality of the industry and stiff competition. Thus, we have downgraded our recommendation on the stock from Neutral to Underperform.
Gerdau's current trailing 12-month earnings multiple is 11.6X, compared with 27.4X for the peer group and 15.9X for the S&P 500. Our $7.75 target price is based on 9.6X 2011 earnings per ADR.
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Yum! Brands Ups Dividend 14%
Kentucky-based Yum! Brands Inc. (NYSE: YUM) recently announced its decision to hike quarterly dividend by 14% from 25 cents paid previously. This equates to an annual payout of $1.14 per share. The increased dividend will be paid on November 4, 2011 to stockholders of record on October 14. This represents the seventh consecutive annual increase in dividend paid by Yum! Brands since its inception in 2004 and brings the forward annual dividend yield as of September 14, 2011 to 2.14%.
The company has a consistent track record of paying quarterly dividends, supported by its cash position. The dividend policy continues to target a payout ratio of 35–40% of the annual net income. During the last five-year period, Yum! Brands' dividend has grown at a rate of 32.8%; a much faster pace than the industry average of 6.3%.
The last dividend hike of 19% to 25 cents was announced in September 2010. Prior to that, Yum! announced a dividend hike of 11% in September 2009 along with an authorization of 300 million share repurchase.
One of Yum! Brands' peers, Frisch's Restaurants Inc. (AMEX: FRS) announced a 6.7% increment in its dividend to 16 cents, early this week. Another peer, Brinker International Inc. (NYSE: EAT) increased its quarterly dividend by 14% to 16 cents per share in August end.
Yum! Brands' forward annualized dividend yield surpassed the industry average of 1.48%. However, it lagged forward annualized dividend yields of 3.23% and 2.98% of Frisch's Restaurants and Brinker, respectively.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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