DARDEN RESTAURANTS INC (DRI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DRI - US2371941053 - Common Stock
183.3 USD
+4.18 (+2.33%)
183.3 USD
0 (0%)
DRI gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 131 industry peers in the Hotels, Restaurants & Leisure industry. DRI scores excellent on profitability, 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
In the past year DRI was profitable.
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
DRI has a better Return On Assets (8.62%) than 79.39% of its industry peers.
The Return On Equity of DRI (49.43%) is better than 90.84% of its industry peers.
Looking at the Return On Invested Capital, with a value of 12.01%, DRI is in the better half of the industry, outperforming 77.10% 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 10.43%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.62% | ||
| ROE | 49.43% | ||
| ROIC | 12.01% |
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 8.90%. This is in the better half of the industry: DRI outperforms 68.70% of its industry peers.
In the last couple of years the Profit Margin of DRI has declined.
DRI has a Operating Margin of 11.63%. This is in the better half of the industry: DRI outperforms 62.60% of its industry peers.
In the last couple of years the Operating Margin of DRI has grown nicely.
Looking at the Gross Margin, with a value of 21.86%, DRI is doing worse than 85.50% of the companies in the same industry.
In the last couple of years the Gross Margin of DRI has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.63% | ||
| PM (TTM) | 8.9% | ||
| GM | 21.86% |
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.
Compared to 1 year ago, DRI has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.38 indicates that DRI is not a great score, but indicates only limited risk for bankruptcy at the moment.
DRI has a Altman-Z score of 2.38. This is in the better half of the industry: DRI outperforms 64.89% of its industry peers.
The Debt to FCF ratio of DRI is 3.68, which is a good value as it means it would take DRI, 3.68 years of fcf income to pay off all of its debts.
DRI has a Debt to FCF ratio of 3.68. This is in the better half of the industry: DRI outperforms 79.39% of its industry peers.
A Debt/Equity ratio of 1.76 is on the high side and indicates that DRI has dependencies on debt financing.
DRI's Debt to Equity ratio of 1.76 is in line compared to the rest of the industry. DRI outperforms 52.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.76 | ||
| Debt/FCF | 3.68 | ||
| Altman-Z | 2.38 |
ROIC/WACC1.44
WACC8.34%
2.3 Liquidity
A Current Ratio of 0.40 indicates that DRI may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.40, DRI is doing worse than 83.97% of the companies in the same industry.
DRI has a Quick Ratio of 0.40. 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 worse Quick ratio (0.27) than 89.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.4 | ||
| Quick Ratio | 0.27 |
3. Growth
3.1 Past
DRI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.38%, which is quite good.
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.
The Revenue has grown by 8.30% in the past year. This is quite good.
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)10.38%
EPS 3Y8.81%
EPS 5Y24.78%
EPS Q2Q%12.57%
Revenue 1Y (TTM)8.3%
Revenue growth 3Y7.84%
Revenue growth 5Y9.12%
Sales Q2Q%10.44%
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 8.68% on average per year.
The Revenue is expected to grow by 5.58% on average over the next years.
EPS Next Y12.15%
EPS Next 2Y9.67%
EPS Next 3Y9.62%
EPS Next 5Y8.68%
Revenue Next Year8.3%
Revenue Next 2Y6.01%
Revenue Next 3Y5.83%
Revenue Next 5Y5.58%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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
The Price/Earnings ratio is 18.74, which indicates a rather expensive current valuation of DRI.
DRI's Price/Earnings ratio is a bit cheaper when compared to the industry. DRI is cheaper than 72.52% of the companies in the same industry.
When comparing the Price/Earnings ratio of DRI to the average of the S&P500 Index (26.76), we can say DRI is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 15.94, the valuation of DRI can be described as correct.
Based on the Price/Forward Earnings ratio, DRI is valued a bit cheaper than 72.52% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of DRI to the average of the S&P500 Index (23.96), we can say DRI is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.74 | ||
| Fwd PE | 15.94 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as DRI.
Based on the Price/Free Cash Flow ratio, DRI is valued a bit cheaper than 70.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.97 | ||
| EV/EBITDA | 12.4 |
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)1.54
PEG (5Y)0.76
EPS Next 2Y9.67%
EPS Next 3Y9.62%
5. Dividend
5.1 Amount
DRI has a Yearly Dividend Yield of 3.29%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.84, DRI pays a better dividend. On top of this DRI pays more dividend than 88.55% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.31, DRI pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.29% |
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
DRI pays out 60.69% of its income as dividend. This is not a sustainable payout ratio.
DRI's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP60.69%
EPS Next 2Y9.67%
EPS Next 3Y9.62%
183.3
+4.18 (+2.33%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners94.67%
Inst Owner Change-3.58%
Ins Owners0.28%
Ins Owner Change8.92%
Market Cap21.32B
Revenue(TTM)12.36B
Net Income(TTM)1.10B
Analysts77.3
Price Target224.8 (22.64%)
Short Float %3.31%
Short Ratio3.02
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.29% |
Yearly Dividend5.58
Dividend Growth(5Y)16.99%
DP60.69%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.61%
Min EPS beat(2)-2.55%
Max EPS beat(2)-0.66%
EPS beat(4)0
Avg EPS beat(4)-1.12%
Min EPS beat(4)-2.55%
Max EPS beat(4)-0.42%
EPS beat(8)2
Avg EPS beat(8)-0.71%
EPS beat(12)6
Avg EPS beat(12)0.34%
EPS beat(16)8
Avg EPS beat(16)-0.28%
Revenue beat(2)0
Avg Revenue beat(2)-0.75%
Min Revenue beat(2)-0.82%
Max Revenue beat(2)-0.68%
Revenue beat(4)0
Avg Revenue beat(4)-1.38%
Min Revenue beat(4)-2.74%
Max Revenue beat(4)-0.68%
Revenue beat(8)0
Avg Revenue beat(8)-1.7%
Revenue beat(12)2
Avg Revenue beat(12)-1.05%
Revenue beat(16)4
Avg Revenue beat(16)-0.97%
PT rev (1m)-0.64%
PT rev (3m)-5.25%
EPS NQ rev (1m)-0.07%
EPS NQ rev (3m)-4.44%
EPS NY rev (1m)-0.04%
EPS NY rev (3m)-0.7%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)-0.13%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)-0.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.74 | ||
| Fwd PE | 15.94 | ||
| P/S | 1.72 | ||
| P/FCF | 19.97 | ||
| P/OCF | 12.06 | ||
| P/B | 9.58 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.4 |
EPS(TTM)9.78
EY5.34%
EPS(NY)11.5
Fwd EY6.27%
FCF(TTM)9.18
FCFY5.01%
OCF(TTM)15.2
OCFY8.29%
SpS106.31
BVpS19.14
TBVpS-6.7
PEG (NY)1.54
PEG (5Y)0.76
Graham Number64.89
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.62% | ||
| ROE | 49.43% | ||
| ROCE | 13.81% | ||
| ROIC | 12.01% | ||
| ROICexc | 12.25% | ||
| ROICexgc | 17.27% | ||
| OM | 11.63% | ||
| PM (TTM) | 8.9% | ||
| GM | 21.86% | ||
| FCFM | 8.64% |
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-Score6
Asset Turnover0.97
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.76 | ||
| Debt/FCF | 3.68 | ||
| Debt/EBITDA | 1.99 | ||
| Cap/Depr | 132.15% | ||
| Cap/Sales | 5.66% | ||
| Interest Coverage | 8.46 | ||
| Cash Conversion | 89.82% | ||
| Profit Quality | 97.06% | ||
| Current Ratio | 0.4 | ||
| Quick Ratio | 0.27 | ||
| Altman-Z | 2.38 |
F-Score6
WACC8.34%
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)10.38%
EPS 3Y8.81%
EPS 5Y24.78%
EPS Q2Q%12.57%
EPS Next Y12.15%
EPS Next 2Y9.67%
EPS Next 3Y9.62%
EPS Next 5Y8.68%
Revenue 1Y (TTM)8.3%
Revenue growth 3Y7.84%
Revenue growth 5Y9.12%
Sales Q2Q%10.44%
Revenue Next Year8.3%
Revenue Next 2Y6.01%
Revenue Next 3Y5.83%
Revenue Next 5Y5.58%
EBIT growth 1Y5.74%
EBIT growth 3Y6.75%
EBIT growth 5Y26.36%
EBIT Next Year48.37%
EBIT Next 3Y18.01%
EBIT Next 5Y12.43%
FCF growth 1Y39.47%
FCF growth 3Y6.34%
FCF growth 5Y35.25%
OCF growth 1Y27.42%
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.
What is the valuation status of DARDEN RESTAURANTS INC (DRI) stock?
ChartMill assigns a valuation rating of 5 / 10 to DARDEN RESTAURANTS INC (DRI). This can be considered as Fairly Valued.
Can you provide the profitability details for DARDEN RESTAURANTS INC?
DARDEN RESTAURANTS INC (DRI) has a profitability rating of 7 / 10.
What is the valuation of DARDEN RESTAURANTS INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for DARDEN RESTAURANTS INC (DRI) is 18.74 and the Price/Book (PB) ratio is 9.58.
How financially healthy is DARDEN RESTAURANTS INC?
The financial health rating of DARDEN RESTAURANTS INC (DRI) is 4 / 10.