Yum! Brands, Inc. (NYSE:YUM), the parent company of KFC and Taco Bell restaurants announced that its board of directors approved an 11% increase to its quarterly dividend.

Yum! Brands, Inc. Raises Quarterly Dividend to $0.41/Share

According to the restaurant operator, its quarterly dividend will is now $0.41 per share, up from $0.37 per share. The increase makes the annual dividend rate of the company $1.64 per share.

Yum! Brands, Inc. (NYSE:YUM) will start distributing a quarterly dividend of $0.41 per share on November 7 to shareholders of record at close of business on October 17.

Yum! Brands’ tenth consecutive year of dividend increase

In a statement, David Novak, chairman and CEO of Yum! Brands, Inc. (NYSE:YUM) said,  “I am pleased to inform our shareholders we increased our dividend by 11%, marking the tenth consecutive year we have raised our dividend at a double-digit percentage rate. Over the last five years, we have returned nearly $6 billion of cash through a combination of share repurchases and dividends.”

In addition, Novak emphasized that their primary priority with the operating cash generated by Yum! Brands, Inc. (NYSE:YUM) is to invest in high-return global growth opportunities.

According to him, the substantial free cash flow generation of Yum! Brands, Inc. (NYSE:YUM) allowed its management to return significant cash to shareholders by distributing quarterly dividends and repurchasing shares.

During the second quarter, Yum! Brands, Inc. (NYSE:YUM) reported earnings of $0.73 per share and $3.2 billion in revenue. According to the company, its worldwide restaurant margin increased 3% to 15.5%.  The company repurchased 4.6 million shares worth $346 million year-to-date through July 15, 2014.

Long-term target payout ratio

Yum! Brands, Inc. (NYSE:YUM) is included in a select group of companies in the S&P 500 that increased dividend at a double-digit percentage over the past ten years. The restaurant operator started its dividend payment to shareholders in 2004.

It is targeting a 40% to 45% payout ratio of annual income before items over the long-term. Yum! Brands, Inc. (NYSE:YUM) operates more than 40,000 restaurants in over 125 countries and territories worldwide.