DARDEN RESTAURANTS INC (DRI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DRI - US2371941053 - Common Stock
199.77 USD
-0.48 (-0.24%)
198.18 USD
-1.59 (-0.8%)
We assign a fundamental rating of 5 out of 10 to DRI. DRI was compared to 133 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 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 each of the past 5 years.
Each year in the past 5 years DRI had a positive operating cash flow.
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 79.70% of the companies in the same industry.
With an excellent Return On Equity value of 53.94%, DRI belongs to the best of the industry, outperforming 90.98% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 12.02%, DRI is in the better half of the industry, outperforming 77.44% of the companies in the same industry.
DRI had an Average Return On Invested Capital over the past 3 years of 12.45%. This is above the industry average of 10.39%.
| 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
DRI has a better Profit Margin (8.92%) than 70.68% of its industry peers.
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 63.16% of its industry peers.
DRI's Operating Margin has improved in the last couple of years.
The Gross Margin of DRI (21.63%) is worse than 84.21% of its industry peers.
DRI's Gross Margin has improved in the last couple of years.
| 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.
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 2.45. 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.
DRI has a better Altman-Z score (2.45) than 66.17% of its industry peers.
The Debt to FCF ratio of DRI is 2.67, which is a good value as it means it would take DRI, 2.67 years of fcf income to pay off all of its debts.
DRI has a better Debt to FCF ratio (2.67) than 82.71% of its industry peers.
DRI has a Debt/Equity ratio of 1.24. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.24, DRI is in line with its industry, outperforming 58.65% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.24 | ||
| Debt/FCF | 2.67 | ||
| Altman-Z | 2.45 |
ROIC/WACC1.44
WACC8.32%
2.3 Liquidity
A Current Ratio of 0.39 indicates that DRI may have some problems paying its short term obligations.
The Current ratio of DRI (0.39) is worse than 81.20% of its industry peers.
A Quick Ratio of 0.26 indicates that DRI may have some problems paying its short term obligations.
The Quick ratio of DRI (0.26) is worse than 87.22% 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
Looking at the last year, DRI shows a quite strong growth in Revenue. The Revenue has grown by 8.61% in the last year.
The Revenue has been growing by 9.12% on average over the past years. This is quite good.
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
The Earnings Per Share is expected to grow by 8.68% on average over the next years. This is quite good.
The Revenue is expected to grow by 5.58% on average over the next years.
EPS Next Y11.76%
EPS Next 2Y9.62%
EPS Next 3Y9.63%
EPS Next 5Y8.68%
Revenue Next Year8.84%
Revenue Next 2Y6.39%
Revenue Next 3Y6.07%
Revenue Next 5Y5.58%
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
With a Price/Earnings ratio of 20.32, DRI is valued on the expensive side.
70.68% 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 (26.92), we can say DRI is valued slightly cheaper.
DRI is valuated rather expensively with a Price/Forward Earnings ratio of 17.39.
DRI's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. DRI is cheaper than 68.42% of the companies in the same industry.
DRI is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.57, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.32 | ||
| Fwd PE | 17.39 |
4.2 Price Multiples
DRI's Enterprise Value to EBITDA is on the same level as the industry average.
DRI's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. DRI is cheaper than 67.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.03 | ||
| EV/EBITDA | 12.55 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of DRI may justify a higher PE ratio.
PEG (NY)1.73
PEG (5Y)0.82
EPS Next 2Y9.62%
EPS Next 3Y9.63%
5. Dividend
5.1 Amount
DRI has a Yearly Dividend Yield of 3.21%. Purely for dividend investing, there may be better candidates out there.
DRI's Dividend Yield is rather good when compared to the industry average which is at 1.94. DRI pays more dividend than 88.72% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.94, DRI pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.21% |
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
60.33% 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.
DP60.33%
EPS Next 2Y9.62%
EPS Next 3Y9.63%
199.77
-0.48 (-0.24%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners94.95%
Inst Owner Change0%
Ins Owners0.27%
Ins Owner Change9.99%
Market Cap23.24B
Revenue(TTM)12.58B
Net Income(TTM)1.12B
Analysts77.3
Price Target223.78 (12.02%)
Short Float %3.2%
Short Ratio2.5
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.21% |
Yearly Dividend5.58
Dividend Growth(5Y)16.99%
DP60.33%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.3%
Min EPS beat(2)-2.55%
Max EPS beat(2)-2.05%
EPS beat(4)0
Avg EPS beat(4)-1.53%
Min EPS beat(4)-2.55%
Max EPS beat(4)-0.66%
EPS beat(8)1
Avg EPS beat(8)-1.59%
EPS beat(12)5
Avg EPS beat(12)-0.23%
EPS beat(16)7
Avg EPS beat(16)-0.57%
Revenue beat(2)1
Avg Revenue beat(2)-0.41%
Min Revenue beat(2)-0.82%
Max Revenue beat(2)0%
Revenue beat(4)1
Avg Revenue beat(4)-1.06%
Min Revenue beat(4)-2.74%
Max Revenue beat(4)0%
Revenue beat(8)1
Avg Revenue beat(8)-1.52%
Revenue beat(12)2
Avg Revenue beat(12)-1.16%
Revenue beat(16)4
Avg Revenue beat(16)-1.03%
PT rev (1m)-0.64%
PT rev (3m)-1.64%
EPS NQ rev (1m)-1.86%
EPS NQ rev (3m)-1.94%
EPS NY rev (1m)-0.35%
EPS NY rev (3m)-0.49%
Revenue NQ rev (1m)0.81%
Revenue NQ rev (3m)0.99%
Revenue NY rev (1m)0.5%
Revenue NY rev (3m)0.58%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.32 | ||
| Fwd PE | 17.39 | ||
| P/S | 1.85 | ||
| P/FCF | 24.03 | ||
| P/OCF | 13.67 | ||
| P/B | 11.17 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.55 |
EPS(TTM)9.83
EY4.92%
EPS(NY)11.49
Fwd EY5.75%
FCF(TTM)8.31
FCFY4.16%
OCF(TTM)14.61
OCFY7.31%
SpS108.13
BVpS17.89
TBVpS-7.95
PEG (NY)1.73
PEG (5Y)0.82
Graham Number62.9
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.67% | ||
| ROE | 53.94% | ||
| ROCE | 14.23% | ||
| ROIC | 12.02% | ||
| ROICexc | 12.28% | ||
| ROICexgc | 17.2% | ||
| OM | 11.64% | ||
| PM (TTM) | 8.92% | ||
| GM | 21.63% | ||
| FCFM | 7.69% |
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%
ROICexgc growth 3Y1.15%
ROICexgc 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-Score9
Asset Turnover0.97
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.24 | ||
| Debt/FCF | 2.67 | ||
| Debt/EBITDA | 1.29 | ||
| Cap/Depr | 135.69% | ||
| Cap/Sales | 5.83% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 84.82% | ||
| Profit Quality | 86.17% | ||
| Current Ratio | 0.39 | ||
| Quick Ratio | 0.26 | ||
| Altman-Z | 2.45 |
F-Score9
WACC8.32%
ROIC/WACC1.44
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)8.62%
EPS 3Y8.81%
EPS 5Y24.78%
EPS Q2Q%2.46%
EPS Next Y11.76%
EPS Next 2Y9.62%
EPS Next 3Y9.63%
EPS Next 5Y8.68%
Revenue 1Y (TTM)8.61%
Revenue growth 3Y7.84%
Revenue growth 5Y9.12%
Sales Q2Q%7.34%
Revenue Next Year8.84%
Revenue Next 2Y6.39%
Revenue Next 3Y6.07%
Revenue Next 5Y5.58%
EBIT growth 1Y8.14%
EBIT growth 3Y6.75%
EBIT growth 5Y26.36%
EBIT Next Year47.9%
EBIT Next 3Y17.97%
EBIT Next 5Y12.43%
FCF growth 1Y8.15%
FCF growth 3Y6.34%
FCF growth 5Y35.25%
OCF growth 1Y11.89%
OCF growth 3Y10.58%
OCF growth 5Y19.02%
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 20.32 and the Price/Book (PB) ratio is 11.17.
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%.