Fast food restaurants have proven to be a good place to hide from the recent stock market volatility. Yum! Brands (NYSE:YUM), home of Taco Bell, Pizza Hut and KFC, remains up nearly 5% for the year while the average S&P 500 stock is now negative. The question is whether earnings due the morning of Oct. 31 will keep it there.

Analysts are expecting net income of 83 cents per share, but hoping for 87 cents, on revenue of $1.38 billion for the September quarter. Last quarter saw a 7% gain in operating growth despite falling sales and it maintained full-year guidance, thanks largely to its investment in Grubhub (NYSE:GRUB).

That gain will be reversed when Yum announces full-year numbers, as Grubhub shares fell after their own earnings. But that’s not happening until next year.

What of Yum! Brands

Instead, investors will be looking on Oct. 31 to see how Yum handles the renewed competition from Chipotle Mexican Grill (NASDAQ:CMG), which recruited Taco Bell head Brian Niccol as its CEO, and whether its other brands can get out of first gear.

Niccol’s strategy is aimed squarely at his old employer, with new dishes in late afternoon and nighttime — parts of the day Taco Bell has been dominating. But Taco Bell can still win headlines, as with a promotion giving away tacos for stolen bases during the recent World Series.

While Taco Bell has been stealing hearts and stomachs, Pizza Hut has been languishing. Sales are down in a very crowded market, and investors will be looking to see if its new NFL sponsorship  changes that.

Management calls Pizza Hut’s turnaround a “slow build” and hopes digital loyalty investments made last year start to pay off.

KFC, meanwhile, has been pitching lower prices along with a variety of celebrities , including Reba McEntire, dressed up like founder Harland Sanders on TV ads.

Could Be Better?

All these tactics are efforts to grab a bigger piece of a growing market. Americans are buying fast food at a pace not seen since the first years of the century, but competition is fierce as chains use delivery and discounts to lure customers, at the expense of margins.

Getting food to people faster by any means necessary, even using robots, is now the thing, and Pizza Hut plans to hire 14,000 drivers to meet demand.

Because of this growing competition analysts aren’t jumping up and down over Yum stock, with two recently dropping their buy recommendations and four more suggesting a hold.

Fast food is a battlefield everywhere, even in Africa, where the cost of menu innovation and advertising keeps rising. 

The Bottom Line for YUM Stock

Fast food growth is dependent on economic growth, especially growth in middle class incomes, and that remains strong on a global basis.

Yum has now beaten analyst estimates on earnings for four straight quarters, often by a lot, as it manages to bring 23% of revenue to the net income line through its franchises.

In the franchise model, the franchisor takes the bulk of the profit, focusing on marketing and innovation, while the franchisees take the bulk of the revenue and focus on executing the brand’s promises. This has proven highly profitable for Yum in the past, and other chains have become franchises in response.

Whether Yum can continue to profitably innovate, and stay ahead of intense global competition, remains the test. The shares are up 68% over the last five years, against a 48% gain for the average S&P stock, and the fast food group is doing better than the general market.

It’s not a screaming buy but it may be good shelter in an economic storm.

Dana Blankenhorn is a financial and technology journalist. He is the author of a new mystery thriller, The Reluctant Detective Finds Her Family, available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this article.