DARDEN RESTAURANTS INC (DRI) Stock Fundamental Analysis
NYSE:DRI - New York Stock Exchange, Inc. - US2371941053 - Common Stock - Currency: USD
DRI gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 136 industry peers in the Hotels, Restaurants & Leisure industry. DRI has only an average score on both its financial health and profitability. DRI is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year DRI was profitable.
In the past year DRI had a positive cash flow from operations.
DRI had positive earnings in 4 of the past 5 years.
In the past 5 years DRI always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 8.39%, DRI belongs to the top of the industry, outperforming 80.15% of the companies in the same industry.
DRI has a Return On Equity of 47.83%. This is amongst the best in the industry. DRI outperforms 93.38% of its industry peers.
DRI has a better Return On Invested Capital (11.69%) than 77.94% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for DRI is below the industry average of 15.76%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.39% | ||
| ROE | 47.83% | ||
| ROIC | 11.69% |
ROA(3y)9.35%
ROA(5y)6.69%
ROE(3y)44.59%
ROE(5y)30.78%
ROIC(3y)12.5%
ROIC(5y)9.79%
1.3 Margins
The Profit Margin of DRI (8.96%) is better than 71.32% of its industry peers.
In the last couple of years the Profit Margin of DRI has remained more or less at the same level.
DRI has a Operating Margin of 11.71%. This is comparable to the rest of the industry: DRI outperforms 58.82% of its industry peers.
In the last couple of years the Operating Margin of DRI has grown nicely.
DRI's Gross Margin of 21.55% is on the low side compared to the rest of the industry. DRI is outperformed by 83.09% of its industry peers.
DRI's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.71% | ||
| PM (TTM) | 8.96% | ||
| GM | 21.55% |
OM growth 3Y6.56%
OM growth 5Y3.61%
PM growth 3Y1.04%
PM growth 5Y1.48%
GM growth 3Y0.65%
GM growth 5Y-0.41%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), DRI is creating some value.
DRI has less shares outstanding than it did 1 year ago.
DRI has less shares outstanding than it did 5 years ago.
The debt/assets ratio for DRI is higher compared to a year ago.
2.2 Solvency
DRI has an Altman-Z score of 2.50. This is not the best score and indicates that DRI is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of DRI (2.50) is better than 72.79% of its industry peers.
The Debt to FCF ratio of DRI is 3.63, which is a good value as it means it would take DRI, 3.63 years of fcf income to pay off all of its debts.
DRI has a better Debt to FCF ratio (3.63) than 80.88% of its industry peers.
A Debt/Equity ratio of 1.69 is on the high side and indicates that DRI has dependencies on debt financing.
DRI has a Debt to Equity ratio of 1.69. This is comparable to the rest of the industry: DRI outperforms 57.35% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.69 | ||
| Debt/FCF | 3.63 | ||
| Altman-Z | 2.5 |
ROIC/WACC1.34
WACC8.72%
2.3 Liquidity
DRI has a Current Ratio of 0.39. This is a bad value and indicates that DRI is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.39, DRI is not doing good in the industry: 81.62% of the companies in the same industry are doing better.
DRI has a Quick Ratio of 0.39. This is a bad value and indicates that DRI is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.24, DRI is doing worse than 88.24% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.39 | ||
| Quick Ratio | 0.24 |
3. Growth
3.1 Past
DRI shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.65%.
The Earnings Per Share has been growing by 8.84% on average over the past years. This is quite good.
DRI shows a small growth in Revenue. In the last year, the Revenue has grown by 5.00%.
The Revenue has been growing slightly by 6.00% on average over the past years.
EPS 1Y (TTM)4.65%
EPS 3Y27.29%
EPS 5Y8.84%
EPS Q2Q%6.87%
Revenue 1Y (TTM)5%
Revenue growth 3Y16.54%
Revenue growth 5Y6%
Sales Q2Q%6.16%
3.2 Future
Based on estimates for the next years, DRI will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.58% on average per year.
The Revenue is expected to grow by 5.42% on average over the next years.
EPS Next Y7.9%
EPS Next 2Y10.43%
EPS Next 3Y9.32%
EPS Next 5Y8.58%
Revenue Next Year5.71%
Revenue Next 2Y7.31%
Revenue Next 3Y6.07%
Revenue Next 5Y5.42%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 21.62, the valuation of DRI can be described as rather expensive.
Based on the Price/Earnings ratio, DRI is valued a bit cheaper than the industry average as 65.44% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 28.78, DRI is valued a bit cheaper.
DRI is valuated rather expensively with a Price/Forward Earnings ratio of 18.41.
Based on the Price/Forward Earnings ratio, DRI is valued a bit cheaper than the industry average as 63.24% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 21.32. DRI is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.62 | ||
| Fwd PE | 18.41 |
4.2 Price Multiples
DRI's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, DRI is valued a bit cheaper than the industry average as 67.65% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.71 | ||
| EV/EBITDA | 14.24 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates DRI does not grow enough to justify the current Price/Earnings ratio.
DRI has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.74
PEG (5Y)2.45
EPS Next 2Y10.43%
EPS Next 3Y9.32%
5. Dividend
5.1 Amount
DRI has a Yearly Dividend Yield of 2.79%.
DRI's Dividend Yield is rather good when compared to the industry average which is at 3.85. DRI pays more dividend than 83.82% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.46, DRI has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.79% |
5.2 History
On average, the dividend of DRI grows each year by 11.73%, which is quite nice.
DRI has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of DRI decreased recently.
Dividend Growth(5Y)11.73%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
61.77% of the earnings are spent on dividend by DRI. This is not a sustainable payout ratio.
The dividend of DRI is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP61.77%
EPS Next 2Y10.43%
EPS Next 3Y9.32%
NYSE:DRI (4/28/2025, 2:28:08 PM)
199.56
+0.46 (+0.23%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners97.09%
Inst Owner Change0.93%
Ins Owners0.26%
Ins Owner Change-1.87%
Market Cap23.35B
Analysts77.22
Price Target213.83 (7.15%)
Short Float %4.23%
Short Ratio3.63
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.79% |
Yearly Dividend5.24
Dividend Growth(5Y)11.73%
DP61.77%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.64%
Min EPS beat(2)-0.85%
Max EPS beat(2)-0.42%
EPS beat(4)1
Avg EPS beat(4)-1.58%
Min EPS beat(4)-5.51%
Max EPS beat(4)0.44%
EPS beat(8)4
Avg EPS beat(8)-0.07%
EPS beat(12)7
Avg EPS beat(12)0.5%
EPS beat(16)10
Avg EPS beat(16)1.04%
Revenue beat(2)0
Avg Revenue beat(2)-2.02%
Min Revenue beat(2)-2.74%
Max Revenue beat(2)-1.3%
Revenue beat(4)0
Avg Revenue beat(4)-2%
Min Revenue beat(4)-2.74%
Max Revenue beat(4)-1.3%
Revenue beat(8)0
Avg Revenue beat(8)-1.66%
Revenue beat(12)3
Avg Revenue beat(12)-0.96%
Revenue beat(16)6
Avg Revenue beat(16)-0.56%
PT rev (1m)3.73%
PT rev (3m)8.63%
EPS NQ rev (1m)-0.05%
EPS NQ rev (3m)1.84%
EPS NY rev (1m)-0.05%
EPS NY rev (3m)0.55%
Revenue NQ rev (1m)-0.06%
Revenue NQ rev (3m)1.26%
Revenue NY rev (1m)-0.35%
Revenue NY rev (3m)-0.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.62 | ||
| Fwd PE | 18.41 | ||
| P/S | 1.99 | ||
| P/FCF | 22.71 | ||
| P/OCF | 14 | ||
| P/B | 10.6 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.24 |
EPS(TTM)9.23
EY4.63%
EPS(NY)10.84
Fwd EY5.43%
FCF(TTM)8.79
FCFY4.4%
OCF(TTM)14.25
OCFY7.14%
SpS100.51
BVpS18.82
TBVpS-6.81
PEG (NY)2.74
PEG (5Y)2.45
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.39% | ||
| ROE | 47.83% | ||
| ROCE | 13.4% | ||
| ROIC | 11.69% | ||
| ROICexc | 11.95% | ||
| ROICexgc | 16.99% | ||
| OM | 11.71% | ||
| PM (TTM) | 8.96% | ||
| GM | 21.55% | ||
| FCFM | 8.74% |
ROA(3y)9.35%
ROA(5y)6.69%
ROE(3y)44.59%
ROE(5y)30.78%
ROIC(3y)12.5%
ROIC(5y)9.79%
ROICexc(3y)13%
ROICexc(5y)10.4%
ROICexgc(3y)17.56%
ROICexgc(5y)14.02%
ROCE(3y)14.29%
ROCE(5y)11.22%
ROICexcg growth 3Y19.42%
ROICexcg growth 5Y-15.22%
ROICexc growth 3Y17.25%
ROICexc growth 5Y-6.84%
OM growth 3Y6.56%
OM growth 5Y3.61%
PM growth 3Y1.04%
PM growth 5Y1.48%
GM growth 3Y0.65%
GM growth 5Y-0.41%
F-Score6
Asset Turnover0.94
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.69 | ||
| Debt/FCF | 3.63 | ||
| Debt/EBITDA | 1.98 | ||
| Cap/Depr | 127.62% | ||
| Cap/Sales | 5.43% | ||
| Interest Coverage | 9.06 | ||
| Cash Conversion | 88.79% | ||
| Profit Quality | 97.6% | ||
| Current Ratio | 0.39 | ||
| Quick Ratio | 0.24 | ||
| Altman-Z | 2.5 |
F-Score6
WACC8.72%
ROIC/WACC1.34
Cap/Depr(3y)133.04%
Cap/Depr(5y)122.46%
Cap/Sales(3y)5.12%
Cap/Sales(5y)5.06%
Profit Quality(3y)94.06%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)4.65%
EPS 3Y27.29%
EPS 5Y8.84%
EPS Q2Q%6.87%
EPS Next Y7.9%
EPS Next 2Y10.43%
EPS Next 3Y9.32%
EPS Next 5Y8.58%
Revenue 1Y (TTM)5%
Revenue growth 3Y16.54%
Revenue growth 5Y6%
Sales Q2Q%6.16%
Revenue Next Year5.71%
Revenue Next 2Y7.31%
Revenue Next 3Y6.07%
Revenue Next 5Y5.42%
EBIT growth 1Y1.99%
EBIT growth 3Y24.19%
EBIT growth 5Y9.83%
EBIT Next Year46.69%
EBIT Next 3Y19.13%
EBIT Next 5Y13.23%
FCF growth 1Y9.1%
FCF growth 3Y2.12%
FCF growth 5Y4.77%
OCF growth 1Y12.47%
OCF growth 3Y10.52%
OCF growth 5Y5.1%