DARDEN RESTAURANTS INC (DRI)
US2371941053 - Common Stock
DRI gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 135 industry peers in the Hotels, Restaurants & Leisure industry. While DRI has a great profitability rating, there are some minor concerns on its financial health. DRI has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
DRI had positive earnings in the past year.
In the past year DRI had a positive cash flow from operations.
DRI had positive earnings in 4 of the past 5 years.
DRI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
DRI's Return On Assets of 9.16% is amongst the best of the industry. DRI outperforms 83.58% of its industry peers.
DRI has a Return On Equity of 48.53%. This is amongst the best in the industry. DRI outperforms 96.27% of its industry peers.
DRI's Return On Invested Capital of 12.87% is amongst the best of the industry. DRI outperforms 80.60% of its industry peers.
DRI had an Average Return On Invested Capital over the past 3 years of 12.66%. This is above the industry average of 10.55%.
The 3 year average ROIC (12.66%) for DRI is below the current ROIC(12.87%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.16% | ||
| ROE | 48.53% | ||
| ROIC | 12.87% |
ROA(3y)9.35%
ROA(5y)6.69%
ROE(3y)44.59%
ROE(5y)30.78%
ROIC(3y)12.66%
ROIC(5y)9.89%
1.3 Margins
DRI has a better Profit Margin (9.11%) than 73.88% 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 better Operating Margin (11.98%) than 60.45% of its industry peers.
DRI's Operating Margin has improved in the last couple of years.
The Gross Margin of DRI (21.16%) is worse than 84.33% of its industry peers.
In the last couple of years the Gross Margin of DRI has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.98% | ||
| PM (TTM) | 9.11% | ||
| GM | 21.16% |
OM growth 3Y7.93%
OM growth 5Y4.41%
PM growth 3Y1.04%
PM growth 5Y1.48%
GM growth 3Y0.65%
GM growth 5Y-0.41%
2. Health
2.1 Basic Checks
DRI has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, DRI has less shares outstanding
Compared to 5 years ago, DRI has less shares outstanding
The debt/assets ratio for DRI is higher compared to a year ago.
2.2 Solvency
DRI has an Altman-Z score of 2.57. 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.
DRI has a better Altman-Z score (2.57) than 72.39% of its industry peers.
The Debt to FCF ratio of DRI is 3.14, which is a good value as it means it would take DRI, 3.14 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.14, DRI is in the better half of the industry, outperforming 79.85% of the companies in the same industry.
A Debt/Equity ratio of 1.45 is on the high side and indicates that DRI has dependencies on debt financing.
The Debt to Equity ratio of DRI (1.45) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.45 | ||
| Debt/FCF | 3.14 | ||
| Altman-Z | 2.57 |
ROIC/WACC1.5
WACC8.6%
2.3 Liquidity
DRI has a Current Ratio of 0.35. 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 Current ratio, with a value of 0.35, DRI is doing worse than 85.07% of the companies in the same industry.
DRI has a Quick Ratio of 0.35. 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 Quick ratio value of 0.22, DRI is not doing good in the industry: 93.28% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.35 | ||
| Quick Ratio | 0.22 |
3. Growth
3.1 Past
DRI shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.79%.
The Earnings Per Share has been growing by 8.84% on average over the past years. This is quite good.
The Revenue has been growing slightly by 5.98% in the past year.
The Revenue has been growing slightly by 6.00% on average over the past years.
EPS 1Y (TTM)7.79%
EPS 3Y27.29%
EPS 5Y8.84%
EPS Q2Q%-1.69%
Revenue 1Y (TTM)5.98%
Revenue growth 3Y16.54%
Revenue growth 5Y6%
Sales Q2Q%0.97%
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 8.87% on average per year.
Based on estimates for the next years, DRI will show a small growth in Revenue. The Revenue will grow by 4.59% on average per year.
EPS Next Y7.56%
EPS Next 2Y9.55%
EPS Next 3Y9.04%
EPS Next 5Y8.87%
Revenue Next Year6.33%
Revenue Next 2Y7.09%
Revenue Next 3Y5.97%
Revenue Next 5Y4.59%
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 decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 19.78, which indicates a rather expensive current valuation of DRI.
75.37% of the companies in the same industry are more expensive than DRI, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 29.56, DRI is valued a bit cheaper.
DRI is valuated correctly with a Price/Forward Earnings ratio of 16.42.
Based on the Price/Forward Earnings ratio, DRI is valued a bit cheaper than 78.36% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of DRI to the average of the S&P500 Index (24.20), we can say DRI is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.78 | ||
| Fwd PE | 16.42 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as DRI.
73.88% of the companies in the same industry are more expensive than DRI, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.75 | ||
| EV/EBITDA | 12.62 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
DRI has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.62
PEG (5Y)2.24
EPS Next 2Y9.55%
EPS Next 3Y9.04%
5. Dividend
5.1 Amount
DRI has a Yearly Dividend Yield of 3.29%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.85, DRI pays a better dividend. On top of this DRI pays more dividend than 88.81% of the companies listed in the same industry.
DRI's Dividend Yield is rather good when compared to the S&P500 average which is at 2.19.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.29% |
5.2 History
The dividend of DRI is nicely growing with an annual growth rate of 11.73%!
DRI has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)11.73%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
61.13% of the earnings are spent on dividend by DRI. This is not a sustainable payout ratio.
DRI's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP61.13%
EPS Next 2Y9.55%
EPS Next 3Y9.04%
DARDEN RESTAURANTS INC
NYSE:DRI (11/25/2024, 7:39:20 PM)
After market: 174.75 -0.47 (-0.27%)175.22
+7.53 (+4.49%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap20.59B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.29% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
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Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
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Min Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.78 | ||
| Fwd PE | 16.42 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.62
PEG (5Y)2.24
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.16% | ||
| ROE | 48.53% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 11.98% | ||
| PM (TTM) | 9.11% | ||
| GM | 21.16% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.01
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.45 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.35 | ||
| Quick Ratio | 0.22 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)7.79%
EPS 3Y27.29%
EPS 5Y
EPS Q2Q%
EPS Next Y7.56%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)5.98%
Revenue growth 3Y16.54%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y