Last week’s question and answer

Under my umbrella, you’ll find Taco Bell, KFC, Pizza Hut, A&W All-American Food Restaurants and Long John Silvers. Based in Louisville, Ky., I’m the world’s largest quick-serve restaurant company in terms of system units, sporting roughly 33,000 restaurants around the world in more than 100 countries and territories. I rang up more than $8 billion in sales in 2003. I’m a leader in multibranding, with many locations that feature two of my brands under one roof. In 2002, I changed my name from Tricon Global Restaurants. My ticker symbol is tasty. Who am I? (Answer: Yum! Brands)

Real estate

In 1975, as a single man, I bought my first home — a city derelict — for $6,700. Over time I restored my home, purchased the three neighboring houses as rental properties, and got married. In 1992, my wife and I bought a log home on three acres, surrounded by state game lands, and rented out our city home. Within two years, we sold our city properties to our tenants and paid off our new home. With rents collected and profits from the sales, we got our dream house for free and left four houses in the hands of first-time homeowners. — Phillipp Muth, Lancaster, Pa.

The Fool Responds: You did very well. Owning rental properties can be very profitable, though it isn’t always easy. It helps to understand and perhaps even perform building maintenance. You have to deal with sometimes troublesome tenants, too. Real estate values also can drop, on occasion, but as with stocks, if you’ve invested for the long haul, you stand a better chance of making money.

DuPont dividends

DuPont (NYSE: DD) recently reported earnings that beat analyst expectations, as it showed strong sales growth across all its core business segments.

The firm did point to high energy prices and slowing global economic indicators as posing challenges. But it also didn’t lower what it plans to earn in the year.

DuPont has had three consecutive quarters of strong sales and earnings growth. Now that the company has credibility in forecasting earnings, it is time for investors to assess whether DuPont’s focus on higher-margin businesses is worthy of a robust stock price.

The company is finally coming into its own. From 1997 through 2003, earnings per share declined from $3.61 to $1.66. According to Value Line, capital spending –a company’s investment in its future — plunged from $4.22 a share to an estimated $1.60. And sales declined from $39.91 to an estimated $27 per share.

Having now restructured, DuPont is producing consecutive quarters of good news and pays a dividend that’s much better than average. For investors looking for a diversified company offering growth and dividends, DuPont is shaping up to be a winner. With a price-to-earnings (P/E) ratio around 17, the stock price is not yet at a bargain-basement level, but the price is reasonable — especially given the dividend yield north of 3 percent.

Old stock certificates

Many of us occasionally end up with old stock certificates, unsure how to determine their value. It can be confusing, since many companies merge with and split from other companies over time, changing their names along the way. Some firms end up out of business, while the stock of other obscure companies may now represent ownership in the stock of thriving businesses. Old bonds can present similar puzzles.

A good first step is to see if you can find the company listed in your newspaper’s stock listings, or at one of many sites such as Fool.com or Yahoo.com, where you can look up companies and their stock quotes. Failing that, give your brokerage a jingle and see if they can tell you anything.

As a next step, contact either the secretary of state for the state in which the shares were issued or the “transfer agent” listed on the stock certificate. The transfer agent may not be in business anymore, but if it is, it should be able to help you value the security and determine how many shares you own.

Here are some additional resources suggested, but not endorsed, by the Securities and Exchange Commission:

• At www.scripophily.com, for a fee, you can have some research done on whether your stock or bond certificate has any value. Even if your company has gone belly-up, the certificate may be worth something as a collectible. Scripophily may buy it from you, or you could try hawking it on eBay.
• Financial Stock Guide Service is an annually updated directory of actively traded stocks and obsolete securities. You can have Financial Information Inc. research your certificate by calling (800) 367-3441.