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 135 industry peers in the Hotels, Restaurants & Leisure industry. DRI has only an average score on both its financial health and profitability. DRI has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year DRI was profitable.
DRI had a positive operating cash flow in the past year.
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 has a better Return On Assets (8.33%) than 80.15% of its industry peers.
DRI has a better Return On Equity (50.38%) than 94.66% of its industry peers.
DRI's Return On Invested Capital of 11.43% is fine compared to the rest of the industry. DRI outperforms 76.34% of its industry peers.
DRI had an Average Return On Invested Capital over the past 3 years of 12.50%. This is below the industry average of 16.08%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.33% | ||
| ROE | 50.38% | ||
| ROIC | 11.43% |
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
DRI's Profit Margin of 9.01% is fine compared to the rest of the industry. DRI outperforms 69.47% of its industry peers.
In the last couple of years the Profit Margin of DRI has remained more or less at the same level.
Looking at the Operating Margin, with a value of 11.69%, DRI is in line with its industry, outperforming 55.73% of the companies in the same industry.
In the last couple of years the Operating Margin of DRI has grown nicely.
The Gross Margin of DRI (21.40%) is worse than 83.97% 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 | 11.69% | ||
| PM (TTM) | 9.01% | ||
| GM | 21.4% |
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.
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
DRI has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.46 indicates that DRI is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of DRI (2.46) is better than 68.70% of its industry peers.
DRI has a debt to FCF ratio of 3.77. This is a good value and a sign of high solvency as DRI would need 3.77 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 3.77, DRI is doing good in the industry, outperforming 77.86% of the companies in the same industry.
DRI has a Debt/Equity ratio of 1.87. This is a high value indicating a heavy dependency on external financing.
DRI has a Debt to Equity ratio (1.87) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.87 | ||
| Debt/FCF | 3.77 | ||
| Altman-Z | 2.46 |
ROIC/WACC1.23
WACC9.32%
2.3 Liquidity
DRI has a Current Ratio of 0.37. 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 0.37, DRI is not doing good in the industry: 82.44% of the companies in the same industry are doing better.
DRI has a Quick Ratio of 0.37. 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 0.23, DRI is not doing good in the industry: 94.66% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.37 | ||
| Quick Ratio | 0.23 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.97% over the past year.
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 5.14%.
The Revenue has been growing slightly by 6.00% on average over the past years.
EPS 1Y (TTM)5.97%
EPS 3Y27.29%
EPS 5Y8.84%
EPS Q2Q%10.33%
Revenue 1Y (TTM)5.14%
Revenue growth 3Y16.54%
Revenue growth 5Y6%
Sales Q2Q%5.97%
3.2 Future
DRI is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.48% yearly.
The Revenue is expected to grow by 5.52% on average over the next years.
EPS Next Y7.8%
EPS Next 2Y10.15%
EPS Next 3Y9.5%
EPS Next 5Y8.48%
Revenue Next Year6.08%
Revenue Next 2Y7.02%
Revenue Next 3Y6%
Revenue Next 5Y5.52%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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
The Price/Earnings ratio is 21.65, 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 67.18% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 29.75, DRI is valued a bit cheaper.
With a Price/Forward Earnings ratio of 18.16, DRI is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DRI indicates a somewhat cheap valuation: DRI is cheaper than 67.94% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.44, DRI is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.65 | ||
| Fwd PE | 18.16 |
4.2 Price Multiples
DRI's Enterprise Value to EBITDA ratio is in line with the industry average.
72.52% 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 | 22.21 | ||
| EV/EBITDA | 14.61 |
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)2.78
PEG (5Y)2.45
EPS Next 2Y10.15%
EPS Next 3Y9.5%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.83%, DRI has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.18, DRI pays a better dividend. On top of this DRI pays more dividend than 85.50% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.30, DRI pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.83% |
5.2 History
On average, the dividend of DRI grows each year by 11.73%, which is quite nice.
DRI has paid a dividend for at least 10 years, which is 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
DRI pays out 61.65% of its income as dividend. 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.
DP61.65%
EPS Next 2Y10.15%
EPS Next 3Y9.5%
195.91
-4.55 (-2.27%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners97.09%
Inst Owner Change-4.99%
Ins Owners0.26%
Ins Owner Change-3.47%
Market Cap22.95B
Analysts77.22
Price Target204.58 (4.43%)
Short Float %4.45%
Short Ratio4.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.83% |
Yearly Dividend5.24
Dividend Growth(5Y)11.73%
DP61.65%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.96%
Min EPS beat(2)-5.51%
Max EPS beat(2)-0.42%
EPS beat(4)1
Avg EPS beat(4)-1.65%
Min EPS beat(4)-5.51%
Max EPS beat(4)0.44%
EPS beat(8)5
Avg EPS beat(8)0.42%
EPS beat(12)7
Avg EPS beat(12)-0.25%
EPS beat(16)11
Avg EPS beat(16)3.58%
Revenue beat(2)0
Avg Revenue beat(2)-1.89%
Min Revenue beat(2)-2.48%
Max Revenue beat(2)-1.3%
Revenue beat(4)0
Avg Revenue beat(4)-1.97%
Min Revenue beat(4)-2.63%
Max Revenue beat(4)-1.3%
Revenue beat(8)1
Avg Revenue beat(8)-1.21%
Revenue beat(12)3
Avg Revenue beat(12)-1.02%
Revenue beat(16)7
Avg Revenue beat(16)-0.06%
PT rev (1m)0.41%
PT rev (3m)9.16%
EPS NQ rev (1m)0.04%
EPS NQ rev (3m)0.54%
EPS NY rev (1m)0.04%
EPS NY rev (3m)0.27%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.43%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.65 | ||
| Fwd PE | 18.16 | ||
| P/S | 1.98 | ||
| P/FCF | 22.21 | ||
| P/OCF | 13.79 | ||
| P/B | 11.08 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.61 |
EPS(TTM)9.05
EY4.62%
EPS(NY)10.79
Fwd EY5.51%
FCF(TTM)8.82
FCFY4.5%
OCF(TTM)14.2
OCFY7.25%
SpS98.84
BVpS17.68
TBVpS-7.93
PEG (NY)2.78
PEG (5Y)2.45
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.33% | ||
| ROE | 50.38% | ||
| ROCE | 13.38% | ||
| ROIC | 11.43% | ||
| ROICexc | 11.67% | ||
| ROICexgc | 16.55% | ||
| OM | 11.69% | ||
| PM (TTM) | 9.01% | ||
| GM | 21.4% | ||
| FCFM | 8.93% |
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 Turnover0.92
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.87 | ||
| Debt/FCF | 3.77 | ||
| Debt/EBITDA | 2.11 | ||
| Cap/Depr | 129.48% | ||
| Cap/Sales | 5.44% | ||
| Interest Coverage | 8.94 | ||
| Cash Conversion | 90.4% | ||
| Profit Quality | 99.06% | ||
| Current Ratio | 0.37 | ||
| Quick Ratio | 0.23 | ||
| Altman-Z | 2.46 |
F-Score6
WACC9.32%
ROIC/WACC1.23
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)5.97%
EPS 3Y27.29%
EPS 5Y8.84%
EPS Q2Q%10.33%
EPS Next Y7.8%
EPS Next 2Y10.15%
EPS Next 3Y9.5%
EPS Next 5Y8.48%
Revenue 1Y (TTM)5.14%
Revenue growth 3Y16.54%
Revenue growth 5Y6%
Sales Q2Q%5.97%
Revenue Next Year6.08%
Revenue Next 2Y7.02%
Revenue Next 3Y6%
Revenue Next 5Y5.52%
EBIT growth 1Y3.57%
EBIT growth 3Y24.19%
EBIT growth 5Y9.83%
EBIT Next Year46.39%
EBIT Next 3Y18.85%
EBIT Next 5Y12.98%
FCF growth 1Y15.01%
FCF growth 3Y2.12%
FCF growth 5Y4.77%
OCF growth 1Y17.94%
OCF growth 3Y10.52%
OCF growth 5Y5.1%