Buried in the midst of the holiday season was a press release by Yum! Brands (YUM) announcing their first dividend post spinning off the China business (YUMC). The well written – though accurate release – made no mention of the fact that this was a 41.18% reduction from their prior payout – which incidentally had just been increased.
Now this wasn’t unexpected after the spin with the only disappointment being the manner in which they chose to announce. Yum China is widely expected to initiate a dividend in the future with the only remaining question being whether it will offset the $0.84 annual reduction. If initiated, I suspect it will be either on an annual or interim/final schedule.
Meanwhile, YUM has earned a spot in the penalty box. As this issue is less than 1% of my portfolio the impact will be negligible to my dividends.