DARDEN RESTAURANTS INC (DRI) Stock Fundamental Analysis
USA • New York Stock Exchange • NYSE:DRI • US2371941053
199.55 USD
+0.2 (+0.1%)
Last: Feb 2, 2026, 11:11 AM
Overall DRI gets a fundamental rating of 5 out of 10. We evaluated DRI against 132 industry peers in the Hotels, Restaurants & Leisure industry. DRI scores excellent on profitability, but there are concerns on its financial health. DRI is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
- DRI had positive earnings in the past year.
- DRI had a positive operating cash flow in the past year.
- Each year in the past 5 years DRI has been profitable.
- 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 8.67%, DRI is in the better half of the industry, outperforming 79.55% of the companies in the same industry.
- DRI has a better Return On Equity (53.94%) than 91.67% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 12.02%, DRI is in the better half of the industry, outperforming 77.27% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for DRI is above the industry average of 10.38%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.67% | ||
| ROE | 53.94% | ||
| ROIC | 12.02% |
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 8.92%, DRI is doing good in the industry, outperforming 70.45% of the companies in the same industry.
- In the last couple of years the Profit Margin of DRI has declined.
- DRI's Operating Margin of 11.64% is fine compared to the rest of the industry. DRI outperforms 62.88% of its industry peers.
- In the last couple of years the Operating Margin of DRI has grown nicely.
- DRI's Gross Margin of 21.63% is on the low side compared to the rest of the industry. DRI is outperformed by 84.09% of its industry peers.
- In the last couple of years the Gross Margin of DRI has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.64% | ||
| PM (TTM) | 8.92% | ||
| GM | 21.63% |
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
- 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.
- Compared to 1 year ago, DRI has a worse debt to assets ratio.
2.2 Solvency
- DRI has an Altman-Z score of 2.45. 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.
- With a decent Altman-Z score value of 2.45, DRI is doing good in the industry, outperforming 65.91% of the companies in the same industry.
- The Debt to FCF ratio of DRI is 4.42, which is a neutral value as it means it would take DRI, 4.42 years of fcf income to pay off all of its debts.
- DRI's Debt to FCF ratio of 4.42 is fine compared to the rest of the industry. DRI outperforms 77.27% of its industry peers.
- DRI has a Debt/Equity ratio of 2.05. This is a high value indicating a heavy dependency on external financing.
- DRI's Debt to Equity ratio of 2.05 is in line compared to the rest of the industry. DRI outperforms 50.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.05 | ||
| Debt/FCF | 4.42 | ||
| Altman-Z | 2.45 |
ROIC/WACC1.44
WACC8.37%
2.3 Liquidity
- A Current Ratio of 0.39 indicates that DRI may have some problems paying its short term obligations.
- DRI's Current ratio of 0.39 is on the low side compared to the rest of the industry. DRI is outperformed by 81.06% of its industry peers.
- 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.
- DRI has a Quick ratio of 0.26. This is amonst the worse of the industry: DRI underperforms 87.12% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.39 | ||
| Quick Ratio | 0.26 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 8.62% over the past year.
- The Earnings Per Share has been growing by 24.78% on average over the past years. This is a very strong growth
- The Revenue has grown by 8.61% 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)8.62%
EPS 3Y8.81%
EPS 5Y24.78%
EPS Q2Q%2.46%
Revenue 1Y (TTM)8.61%
Revenue growth 3Y7.84%
Revenue growth 5Y9.12%
Sales Q2Q%7.34%
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 8.73% on average per year.
- The Revenue is expected to grow by 5.76% on average over the next years.
EPS Next Y11.75%
EPS Next 2Y9.67%
EPS Next 3Y9.65%
EPS Next 5Y8.73%
Revenue Next Year9.12%
Revenue Next 2Y6.53%
Revenue Next 3Y6.18%
Revenue Next 5Y5.76%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- 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
- DRI is valuated rather expensively with a Price/Earnings ratio of 20.30.
- DRI's Price/Earnings ratio is a bit cheaper when compared to the industry. DRI is cheaper than 68.18% of the companies in the same industry.
- DRI's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.32.
- A Price/Forward Earnings ratio of 17.35 indicates a rather expensive valuation of DRI.
- 68.18% of the companies in the same industry are more expensive than DRI, based on the Price/Forward Earnings ratio.
- When comparing the Price/Forward Earnings ratio of DRI to the average of the S&P500 Index (25.57), we can say DRI is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.3 | ||
| Fwd PE | 17.35 |
4.2 Price Multiples
- DRI's Enterprise Value to EBITDA is on the same level as 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 67.42% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24 | ||
| EV/EBITDA | 13.37 |
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)1.73
PEG (5Y)0.82
EPS Next 2Y9.67%
EPS Next 3Y9.65%
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 1.25, DRI pays a better dividend. On top of this DRI pays more dividend than 85.61% 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 1.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.96% |
5.2 History
- The dividend of DRI is nicely growing with an annual growth rate of 16.99%!
- 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
- 60.33% 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.
DP60.33%
EPS Next 2Y9.67%
EPS Next 3Y9.65%
DARDEN RESTAURANTS INC / DRI FAQ
Can you provide the ChartMill fundamental rating for DARDEN RESTAURANTS INC?
ChartMill assigns a fundamental rating of 5 / 10 to DRI.
Can you provide the valuation status for DARDEN RESTAURANTS INC?
ChartMill assigns a valuation rating of 4 / 10 to DARDEN RESTAURANTS INC (DRI). This can be considered as Fairly Valued.
How profitable is DARDEN RESTAURANTS INC (DRI) stock?
DARDEN RESTAURANTS INC (DRI) has a profitability rating of 7 / 10.
Can you provide the PE and PB ratios for DRI stock?
The Price/Earnings (PE) ratio for DARDEN RESTAURANTS INC (DRI) is 20.3 and the Price/Book (PB) ratio is 11.16.
Is the dividend of DARDEN RESTAURANTS INC sustainable?
The dividend rating of DARDEN RESTAURANTS INC (DRI) is 5 / 10 and the dividend payout ratio is 60.33%.