The operator of Taco Bell, Pizza Hut, and KFC fast food chains, Yum! Brands (YUM), reported second quarter results, with double-digit growth in the bottom-line. Earnings per share grew 11% to 50 cents, surpassing the Zacks Consensus Estimate of 43 cents.

Driving growth is the company’s overseas divisions (China and
Yum Restaurants International), which constitute the only stable
segment of the entire restaurant industry. Both the divisions are
on track to grow operating earnings by an average CAGR of
20% and 10%, respectively.

The U.S. operations are also
showing signs of revival with an expected operating earnings
growth of 5%. We think the stock provides relative safety and
moderate growth in a turbulent environment and exposure to
faster-growing international markets.

As a result, the company
remains confident of its business model and its ability to deliver
at least 10% EPS growth in 2009 and beyond consistently. As
such, we maintain an Outperform recommendation on the stock.Zacks Investment Research