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 134 industry peers in the Hotels, Restaurants & Leisure industry. Both the profitability and the financial health of DRI get a neutral evaluation. Nothing too spectacular is happening here. 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.
Of the past 5 years DRI 4 years were profitable.
In the past 5 years DRI always reported a positive cash flow from operatings.
1.2 Ratios
DRI has a Return On Assets of 8.33%. This is amongst the best in the industry. DRI outperforms 83.21% of its industry peers.
Looking at the Return On Equity, with a value of 50.38%, DRI belongs to the top of the industry, outperforming 96.18% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 11.43%, DRI is in the better half of the industry, outperforming 76.34% of the companies in the same industry.
DRI had an Average Return On Invested Capital over the past 3 years of 12.50%. This is in line with the industry average of 10.55%.
| 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
With a decent Profit Margin value of 9.01%, DRI is doing good in the industry, outperforming 71.76% of the companies in the same industry.
In the last couple of years the Profit Margin of DRI has remained more or less at the same level.
DRI's Operating Margin of 11.69% is in line compared to the rest of the industry. DRI outperforms 57.25% of its industry peers.
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.
DRI's Gross Margin has been stable in the last couple of years.
| 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.
DRI has less shares outstanding than it did 1 year ago.
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 2.42. 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's Altman-Z score of 2.42 is fine compared to the rest of the industry. DRI outperforms 67.94% 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.
The Debt to FCF ratio of DRI (3.77) is better than 78.63% of its industry peers.
A Debt/Equity ratio of 1.87 is on the high side and indicates that DRI has dependencies on debt 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 | 2.42 |
ROIC/WACC1.3
WACC8.77%
2.3 Liquidity
A Current Ratio of 0.37 indicates that DRI may have some problems paying its short term obligations.
DRI has a Current ratio of 0.37. This is amonst the worse of the industry: DRI underperforms 83.97% of its industry peers.
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.
DRI has a Quick ratio of 0.23. This is amonst the worse of the industry: DRI underperforms 93.89% of its industry peers.
| 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.
Measured over the past years, DRI shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.84% on average per year.
DRI shows a small growth in Revenue. In the last year, the Revenue has grown by 5.14%.
Measured over the past years, DRI shows a small growth in Revenue. The Revenue has been growing by 6.00% on average per year.
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.
Based on estimates for the next years, DRI will show a small growth in Revenue. The Revenue will grow by 5.52% on average per year.
EPS Next Y7.31%
EPS Next 2Y9.61%
EPS Next 3Y9.14%
EPS Next 5Y8.48%
Revenue Next Year6.08%
Revenue Next 2Y7.01%
Revenue Next 3Y5.99%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 21.41, the valuation of DRI can be described as rather expensive.
67.18% of the companies in the same industry are more expensive than DRI, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of DRI to the average of the S&P500 Index (28.28), we can say DRI is valued slightly cheaper.
DRI is valuated rather expensively with a Price/Forward Earnings ratio of 18.14.
Based on the Price/Forward Earnings ratio, DRI is valued a bit cheaper than 69.47% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 91.29. DRI is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.41 | ||
| Fwd PE | 18.14 |
4.2 Price Multiples
DRI's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DRI indicates a somewhat cheap valuation: DRI is cheaper than 73.28% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.03 | ||
| EV/EBITDA | 14.22 |
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)2.93
PEG (5Y)2.42
EPS Next 2Y9.61%
EPS Next 3Y9.14%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.96%, DRI has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.89, 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 2.27, DRI pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.96% |
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.
The dividend of DRI decreased recently.
Dividend Growth(5Y)11.73%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
61.65% 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.
DP61.65%
EPS Next 2Y9.61%
EPS Next 3Y9.14%
DARDEN RESTAURANTS INC
NYSE:DRI (1/29/2025, 8:19:32 PM)
After market: 193.8 0 (0%)193.8
+1.4 (+0.73%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners99.41%
Inst Owner Change-0.48%
Ins Owners0.27%
Ins Owner Change3.07%
Market Cap22.77B
Analysts76.11
Price Target196.84 (1.57%)
Short Float %4.48%
Short Ratio3.89
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.96% |
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)-3.32%
Min EPS beat(2)-5.51%
Max EPS beat(2)-1.13%
EPS beat(4)1
Avg EPS beat(4)-1.82%
Min EPS beat(4)-5.51%
Max EPS beat(4)0.44%
EPS beat(8)5
Avg EPS beat(8)0.33%
EPS beat(12)7
Avg EPS beat(12)-0.31%
EPS beat(16)11
Avg EPS beat(16)3.53%
Revenue beat(2)0
Avg Revenue beat(2)-2.29%
Min Revenue beat(2)-2.48%
Max Revenue beat(2)-2.1%
Revenue beat(4)0
Avg Revenue beat(4)-2.17%
Min Revenue beat(4)-2.63%
Max Revenue beat(4)-1.49%
Revenue beat(8)1
Avg Revenue beat(8)-1.31%
Revenue beat(12)3
Avg Revenue beat(12)-1.09%
Revenue beat(16)7
Avg Revenue beat(16)-0.11%
PT rev (1m)0%
PT rev (3m)5.32%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.85%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.75%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.6%
Revenue NY rev (1m)0.18%
Revenue NY rev (3m)2.52%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.41 | ||
| Fwd PE | 18.14 | ||
| P/S | 1.97 | ||
| P/FCF | 22.03 | ||
| P/OCF | 13.69 | ||
| P/B | 11 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.22 |
EPS(TTM)9.05
EY4.67%
EPS(NY)10.68
Fwd EY5.51%
FCF(TTM)8.8
FCFY4.54%
OCF(TTM)14.16
OCFY7.31%
SpS98.55
BVpS17.62
TBVpS-7.91
PEG (NY)2.93
PEG (5Y)2.42
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 | 2.42 |
F-Score6
WACC8.77%
ROIC/WACC1.3
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 Y7.31%
EPS Next 2Y9.61%
EPS Next 3Y9.14%
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 2Y7.01%
Revenue Next 3Y5.99%
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%