DARDEN RESTAURANTS INC (DRI) Stock Fundamental Analysis
USA - NYSE:DRI - US2371941053 - Common Stock
188.19 USD
+0.74 (+0.39%)
190.18 USD
+1.99 (+1.06%)
Taking everything into account, DRI scores 5 out of 10 in our fundamental rating. DRI was compared to 135 industry peers in the Hotels, Restaurants & Leisure industry. DRI has an excellent profitability rating, but there are some minor concerns on its financial health. DRI has a decent growth rate and is not valued too expensively.
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.
In the past 5 years DRI has always been profitable.
Each year in the past 5 years DRI had a positive operating cash flow.
1.2 Ratios
DRI has a better Return On Assets (8.62%) than 82.22% of its industry peers.
DRI's Return On Equity of 49.43% is amongst the best of the industry. DRI outperforms 92.59% of its industry peers.
The Return On Invested Capital of DRI (12.01%) is better than 78.52% of its industry peers.
DRI had an Average Return On Invested Capital over the past 3 years of 12.45%. This is in line with the industry average of 10.67%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.62% | ||
| ROE | 49.43% | ||
| ROIC | 12.01% |
ROA(3y)9%
ROA(5y)8.46%
ROE(3y)45.28%
ROE(5y)40.31%
ROIC(3y)12.45%
ROIC(5y)11.32%
1.3 Margins
With a decent Profit Margin value of 8.90%, DRI is doing good in the industry, outperforming 71.11% of the companies in the same industry.
In the last couple of years the Profit Margin of DRI has declined.
DRI has a Operating Margin of 11.63%. This is in the better half of the industry: DRI outperforms 62.96% of its industry peers.
In the last couple of years the Operating Margin of DRI has grown nicely.
DRI has a Gross Margin of 21.86%. This is amonst the worse of the industry: DRI underperforms 84.44% of its industry peers.
DRI's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.63% | ||
| PM (TTM) | 8.9% | ||
| GM | 21.86% |
OM growth 3Y-1.01%
OM growth 5Y15.81%
PM growth 3Y-4.23%
PM growth 5YN/A
GM growth 3Y1.84%
GM growth 5Y3.94%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so DRI is still creating some value.
The number of shares outstanding for DRI has been reduced compared to 1 year ago.
Compared to 5 years ago, DRI has less shares outstanding
Compared to 1 year ago, DRI has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.44 indicates that DRI is not a great score, but indicates only limited risk for bankruptcy at the moment.
DRI's Altman-Z score of 2.44 is fine compared to the rest of the industry. DRI outperforms 65.93% of its industry peers.
The Debt to FCF ratio of DRI is 3.68, which is a good value as it means it would take DRI, 3.68 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of DRI (3.68) is better than 78.52% of its industry peers.
DRI has a Debt/Equity ratio of 1.76. This is a high value indicating a heavy dependency on external financing.
DRI has a Debt to Equity ratio (1.76) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.76 | ||
| Debt/FCF | 3.68 | ||
| Altman-Z | 2.44 |
ROIC/WACC1.48
WACC8.13%
2.3 Liquidity
A Current Ratio of 0.40 indicates that DRI may have some problems paying its short term obligations.
The Current ratio of DRI (0.40) is worse than 82.22% of its industry peers.
A Quick Ratio of 0.27 indicates that DRI may have some problems paying its short term obligations.
DRI has a worse Quick ratio (0.27) than 86.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.4 | ||
| Quick Ratio | 0.27 |
3. Growth
3.1 Past
DRI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.38%, which is quite good.
DRI shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 24.78% yearly.
The Revenue has grown by 8.30% in the past year. This is quite good.
Measured over the past years, DRI shows a quite strong growth in Revenue. The Revenue has been growing by 9.12% on average per year.
EPS 1Y (TTM)10.38%
EPS 3Y8.81%
EPS 5Y24.78%
EPS Q2Q%12.57%
Revenue 1Y (TTM)8.3%
Revenue growth 3Y7.84%
Revenue growth 5Y9.12%
Sales Q2Q%10.44%
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 8.68% on average per year.
Based on estimates for the next years, DRI will show a small growth in Revenue. The Revenue will grow by 5.58% on average per year.
EPS Next Y12.31%
EPS Next 2Y9.8%
EPS Next 3Y9.7%
EPS Next 5Y8.68%
Revenue Next Year8.21%
Revenue Next 2Y6.01%
Revenue Next 3Y5.8%
Revenue Next 5Y5.58%
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 decreasing.
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 19.24, which indicates a rather expensive current valuation of DRI.
Based on the Price/Earnings ratio, DRI is valued a bit cheaper than the industry average as 69.63% of the companies are valued more expensively.
DRI is valuated rather cheaply when we compare the Price/Earnings ratio to 27.40, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 16.33, which indicates a correct valuation of DRI.
DRI's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. DRI is cheaper than 70.37% of the companies in the same industry.
DRI is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.94, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.24 | ||
| Fwd PE | 16.33 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as DRI.
Based on the Price/Free Cash Flow ratio, DRI is valued a bit cheaper than the industry average as 74.07% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.5 | ||
| EV/EBITDA | 12.94 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
DRI has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.56
PEG (5Y)0.78
EPS Next 2Y9.8%
EPS Next 3Y9.7%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.09%, DRI has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 5.94, DRI pays a better dividend. On top of this DRI pays more dividend than 85.19% of the companies listed in the same industry.
DRI's Dividend Yield is a higher than the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.09% |
5.2 History
On average, the dividend of DRI grows each year by 16.99%, which is quite nice.
DRI has paid a dividend for at least 10 years, which is a reliable track record.
DRI has decreased its dividend recently.
Dividend Growth(5Y)16.99%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
60.69% 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.
DP60.69%
EPS Next 2Y9.8%
EPS Next 3Y9.7%
188.19
+0.74 (+0.39%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners95.22%
Inst Owner Change0.02%
Ins Owners0.28%
Ins Owner Change9.15%
Market Cap21.89B
Analysts76.76
Price Target227.51 (20.89%)
Short Float %3.85%
Short Ratio3.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.09% |
Yearly Dividend5.58
Dividend Growth(5Y)16.99%
DP60.69%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.61%
Min EPS beat(2)-2.55%
Max EPS beat(2)-0.66%
EPS beat(4)0
Avg EPS beat(4)-1.12%
Min EPS beat(4)-2.55%
Max EPS beat(4)-0.42%
EPS beat(8)2
Avg EPS beat(8)-0.71%
EPS beat(12)6
Avg EPS beat(12)0.34%
EPS beat(16)8
Avg EPS beat(16)-0.28%
Revenue beat(2)0
Avg Revenue beat(2)-0.75%
Min Revenue beat(2)-0.82%
Max Revenue beat(2)-0.68%
Revenue beat(4)0
Avg Revenue beat(4)-1.38%
Min Revenue beat(4)-2.74%
Max Revenue beat(4)-0.68%
Revenue beat(8)0
Avg Revenue beat(8)-1.7%
Revenue beat(12)2
Avg Revenue beat(12)-1.05%
Revenue beat(16)4
Avg Revenue beat(16)-0.97%
PT rev (1m)-4%
PT rev (3m)-4.06%
EPS NQ rev (1m)-4.46%
EPS NQ rev (3m)-4.6%
EPS NY rev (1m)-0.56%
EPS NY rev (3m)-0.55%
Revenue NQ rev (1m)-0.19%
Revenue NQ rev (3m)-0.1%
Revenue NY rev (1m)-0.15%
Revenue NY rev (3m)-0.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.24 | ||
| Fwd PE | 16.33 | ||
| P/S | 1.77 | ||
| P/FCF | 20.5 | ||
| P/OCF | 12.38 | ||
| P/B | 9.83 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.94 |
EPS(TTM)9.78
EY5.2%
EPS(NY)11.53
Fwd EY6.12%
FCF(TTM)9.18
FCFY4.88%
OCF(TTM)15.2
OCFY8.08%
SpS106.31
BVpS19.14
TBVpS-6.7
PEG (NY)1.56
PEG (5Y)0.78
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.62% | ||
| ROE | 49.43% | ||
| ROCE | 13.81% | ||
| ROIC | 12.01% | ||
| ROICexc | 12.25% | ||
| ROICexgc | 17.27% | ||
| OM | 11.63% | ||
| PM (TTM) | 8.9% | ||
| GM | 21.86% | ||
| FCFM | 8.64% |
ROA(3y)9%
ROA(5y)8.46%
ROE(3y)45.28%
ROE(5y)40.31%
ROIC(3y)12.45%
ROIC(5y)11.32%
ROICexc(3y)12.83%
ROICexc(5y)11.9%
ROICexgc(3y)17.84%
ROICexgc(5y)16.28%
ROCE(3y)14.18%
ROCE(5y)12.88%
ROICexcg growth 3Y1.15%
ROICexcg growth 5Y21.42%
ROICexc growth 3Y-1.77%
ROICexc growth 5Y19.57%
OM growth 3Y-1.01%
OM growth 5Y15.81%
PM growth 3Y-4.23%
PM growth 5YN/A
GM growth 3Y1.84%
GM growth 5Y3.94%
F-Score6
Asset Turnover0.97
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.76 | ||
| Debt/FCF | 3.68 | ||
| Debt/EBITDA | 1.99 | ||
| Cap/Depr | 132.15% | ||
| Cap/Sales | 5.66% | ||
| Interest Coverage | 8.46 | ||
| Cash Conversion | 89.82% | ||
| Profit Quality | 97.06% | ||
| Current Ratio | 0.4 | ||
| Quick Ratio | 0.27 | ||
| Altman-Z | 2.44 |
F-Score6
WACC8.13%
ROIC/WACC1.48
Cap/Depr(3y)140.02%
Cap/Depr(5y)121.27%
Cap/Sales(3y)5.58%
Cap/Sales(5y)4.94%
Profit Quality(3y)96.8%
Profit Quality(5y)105.36%
High Growth Momentum
Growth
EPS 1Y (TTM)10.38%
EPS 3Y8.81%
EPS 5Y24.78%
EPS Q2Q%12.57%
EPS Next Y12.31%
EPS Next 2Y9.8%
EPS Next 3Y9.7%
EPS Next 5Y8.68%
Revenue 1Y (TTM)8.3%
Revenue growth 3Y7.84%
Revenue growth 5Y9.12%
Sales Q2Q%10.44%
Revenue Next Year8.21%
Revenue Next 2Y6.01%
Revenue Next 3Y5.8%
Revenue Next 5Y5.58%
EBIT growth 1Y5.74%
EBIT growth 3Y6.75%
EBIT growth 5Y26.36%
EBIT Next Year48.65%
EBIT Next 3Y17.97%
EBIT Next 5Y12.43%
FCF growth 1Y39.47%
FCF growth 3Y6.34%
FCF growth 5Y35.25%
OCF growth 1Y27.42%
OCF growth 3Y10.58%
OCF growth 5Y19.02%