DARDEN RESTAURANTS INC (DRI) Stock Fundamental Analysis
USA - NYSE:DRI - US2371941053 - Common Stock
212.61 USD
-0.79 (-0.37%)
212.61 USD
0 (0%)
Overall DRI gets a fundamental rating of 5 out of 10. We evaluated DRI 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 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.
DRI had a positive operating cash flow in the past year.
In the past 5 years DRI has always been profitable.
In the past 5 years DRI always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of DRI (8.34%) is better than 79.85% of its industry peers.
DRI has a better Return On Equity (45.41%) than 91.79% of its industry peers.
With a decent Return On Invested Capital value of 12.03%, DRI is doing good in the industry, outperforming 78.36% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for DRI is below the industry average of 15.68%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.34% | ||
| ROE | 45.41% | ||
| ROIC | 12.03% |
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 Profit Margin of 8.69%. This is in the better half of the industry: DRI outperforms 70.15% of its industry peers.
DRI's Profit Margin has declined in the last couple of years.
DRI has a better Operating Margin (11.69%) than 62.69% of its industry peers.
DRI's Operating Margin has improved in the last couple of years.
DRI has a worse Gross Margin (21.88%) than 85.07% of its industry peers.
DRI's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.69% | ||
| PM (TTM) | 8.69% | ||
| GM | 21.88% |
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
DRI has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, DRI has less shares outstanding
DRI has less shares outstanding than it did 5 years ago.
DRI has a worse debt/assets ratio than last year.
2.2 Solvency
DRI has an Altman-Z score of 2.66. 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 2.66 is fine compared to the rest of the industry. DRI outperforms 67.16% of its industry peers.
The Debt to FCF ratio of DRI is 3.64, which is a good value as it means it would take DRI, 3.64 years of fcf income to pay off all of its debts.
DRI has a better Debt to FCF ratio (3.64) than 79.10% of its industry peers.
A Debt/Equity ratio of 1.61 is on the high side and indicates that DRI has dependencies on debt financing.
DRI has a Debt to Equity ratio of 1.61. This is comparable to the rest of the industry: DRI outperforms 55.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.61 | ||
| Debt/FCF | 3.64 | ||
| Altman-Z | 2.66 |
ROIC/WACC1.37
WACC8.81%
2.3 Liquidity
A Current Ratio of 0.42 indicates that DRI may have some problems paying its short term obligations.
DRI has a worse Current ratio (0.42) than 82.84% of its industry peers.
DRI has a Quick Ratio of 0.42. 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 0.28, DRI is not doing good in the industry: 85.82% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.42 | ||
| Quick Ratio | 0.28 |
3. Growth
3.1 Past
DRI shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.54%.
Measured over the past years, DRI shows a very strong growth in Earnings Per Share. The EPS has been growing by 24.78% on average per year.
DRI shows a small growth in Revenue. In the last year, the Revenue has grown by 6.03%.
DRI shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.12% yearly.
EPS 1Y (TTM)7.54%
EPS 3Y8.81%
EPS 5Y24.78%
EPS Q2Q%12.45%
Revenue 1Y (TTM)6.03%
Revenue growth 3Y7.84%
Revenue growth 5Y9.12%
Sales Q2Q%10.63%
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 8.54% yearly.
Based on estimates for the next years, DRI will show a small growth in Revenue. The Revenue will grow by 5.43% on average per year.
EPS Next Y12.94%
EPS Next 2Y10%
EPS Next 3Y9.68%
EPS Next 5Y8.54%
Revenue Next Year8.39%
Revenue Next 2Y6.01%
Revenue Next 3Y5.74%
Revenue Next 5Y5.43%
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
Based on the Price/Earnings ratio of 22.24, the valuation of DRI can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of DRI indicates a somewhat cheap valuation: DRI is cheaper than 67.16% of the companies listed in the same industry.
DRI's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.30.
The Price/Forward Earnings ratio is 19.69, which indicates a rather expensive current valuation of DRI.
61.94% of the companies in the same industry are more expensive than DRI, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.73. DRI is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.24 | ||
| Fwd PE | 19.69 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DRI is on the same level as its industry peers.
DRI's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. DRI is cheaper than 71.64% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.15 | ||
| EV/EBITDA | 14.72 |
4.3 Compensation for Growth
DRI's 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)1.72
PEG (5Y)0.9
EPS Next 2Y10%
EPS Next 3Y9.68%
5. Dividend
5.1 Amount
DRI has a Yearly Dividend Yield of 2.67%. 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 3.99. DRI pays more dividend than 82.84% of the companies in the same industry.
DRI's Dividend Yield is comparable with the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.67% |
5.2 History
On average, the dividend of DRI grows each year by 16.99%, which is quite nice.
DRI has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of DRI decreased recently.
Dividend Growth(5Y)16.99%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
DRI pays out 62.74% 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.
DP62.74%
EPS Next 2Y10%
EPS Next 3Y9.68%
212.61
-0.79 (-0.37%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners89.02%
Inst Owner Change-1.96%
Ins Owners0.28%
Ins Owner Change7.86%
Market Cap24.79B
Analysts77.14
Price Target237 (11.47%)
Short Float %3.64%
Short Ratio3.48
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.67% |
Yearly Dividend5.58
Dividend Growth(5Y)16.99%
DP62.74%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.75%
Min EPS beat(2)-0.85%
Max EPS beat(2)-0.66%
EPS beat(4)0
Avg EPS beat(4)-1.86%
Min EPS beat(4)-5.51%
Max EPS beat(4)-0.42%
EPS beat(8)3
Avg EPS beat(8)-0.23%
EPS beat(12)6
Avg EPS beat(12)0.31%
EPS beat(16)9
Avg EPS beat(16)0.25%
Revenue beat(2)0
Avg Revenue beat(2)-1.71%
Min Revenue beat(2)-2.74%
Max Revenue beat(2)-0.68%
Revenue beat(4)0
Avg Revenue beat(4)-1.8%
Min Revenue beat(4)-2.74%
Max Revenue beat(4)-0.68%
Revenue beat(8)0
Avg Revenue beat(8)-1.62%
Revenue beat(12)2
Avg Revenue beat(12)-1.14%
Revenue beat(16)5
Avg Revenue beat(16)-0.79%
PT rev (1m)0.05%
PT rev (3m)10.61%
EPS NQ rev (1m)0.06%
EPS NQ rev (3m)0.78%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.33%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0.09%
Revenue NY rev (3m)-0.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.24 | ||
| Fwd PE | 19.69 | ||
| P/S | 2.05 | ||
| P/FCF | 24.15 | ||
| P/OCF | 14.59 | ||
| P/B | 10.72 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.72 |
EPS(TTM)9.56
EY4.5%
EPS(NY)10.8
Fwd EY5.08%
FCF(TTM)8.81
FCFY4.14%
OCF(TTM)14.57
OCFY6.85%
SpS103.58
BVpS19.82
TBVpS-6.79
PEG (NY)1.72
PEG (5Y)0.9
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.34% | ||
| ROE | 45.41% | ||
| ROCE | 13.65% | ||
| ROIC | 12.03% | ||
| ROICexc | 12.31% | ||
| ROICexgc | 17.77% | ||
| OM | 11.69% | ||
| PM (TTM) | 8.69% | ||
| GM | 21.88% | ||
| FCFM | 8.5% |
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 Turnover0.96
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.61 | ||
| Debt/FCF | 3.64 | ||
| Debt/EBITDA | 1.93 | ||
| Cap/Depr | 130.19% | ||
| Cap/Sales | 5.56% | ||
| Interest Coverage | 8.21 | ||
| Cash Conversion | 88.11% | ||
| Profit Quality | 97.82% | ||
| Current Ratio | 0.42 | ||
| Quick Ratio | 0.28 | ||
| Altman-Z | 2.66 |
F-Score6
WACC8.81%
ROIC/WACC1.37
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)7.54%
EPS 3Y8.81%
EPS 5Y24.78%
EPS Q2Q%12.45%
EPS Next Y12.94%
EPS Next 2Y10%
EPS Next 3Y9.68%
EPS Next 5Y8.54%
Revenue 1Y (TTM)6.03%
Revenue growth 3Y7.84%
Revenue growth 5Y9.12%
Sales Q2Q%10.63%
Revenue Next Year8.39%
Revenue Next 2Y6.01%
Revenue Next 3Y5.74%
Revenue Next 5Y5.43%
EBIT growth 1Y2.95%
EBIT growth 3Y6.75%
EBIT growth 5Y26.36%
EBIT Next Year48.98%
EBIT Next 3Y17.9%
EBIT Next 5Y12.51%
FCF growth 1Y4.37%
FCF growth 3Y6.34%
FCF growth 5Y35.25%
OCF growth 1Y5.37%
OCF growth 3Y10.58%
OCF growth 5Y19.02%