DARDEN RESTAURANTS INC (DRI)

US2371941053 - Common Stock

167.208  +0.24 (+0.14%)

Fundamental Rating

5

Taking everything into account, DRI scores 5 out of 10 in our fundamental rating. DRI was compared to 135 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 decent growth rate and is not valued too expensively.



7

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.
Of the past 5 years DRI 4 years were profitable.
Each year in the past 5 years DRI had a positive operating cash flow.

1.2 Ratios

With an excellent Return On Assets value of 9.11%, DRI belongs to the best of the industry, outperforming 82.84% of the companies in the same industry.
DRI's Return On Equity of 47.44% is amongst the best of the industry. DRI outperforms 91.79% of its industry peers.
Looking at the Return On Invested Capital, with a value of 12.72%, DRI is in the better half of the industry, outperforming 79.85% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for DRI is in line with the industry average of 10.25%.
The last Return On Invested Capital (12.72%) for DRI is above the 3 year average (10.56%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 9.11%
ROE 47.44%
ROIC 12.72%
ROA(3y)8.3%
ROA(5y)7.29%
ROE(3y)36.77%
ROE(5y)27.58%
ROIC(3y)10.57%
ROIC(5y)10.54%

1.3 Margins

Looking at the Profit Margin, with a value of 9.24%, DRI is in the better half of the industry, outperforming 70.90% of the companies in the same industry.
In the last couple of years the Profit Margin of DRI has grown nicely.
With a decent Operating Margin value of 12.00%, DRI is doing good in the industry, outperforming 61.19% of the companies in the same industry.
In the last couple of years the Operating Margin of DRI has grown nicely.
DRI has a Gross Margin of 21.03%. This is amonst the worse of the industry: DRI underperforms 86.57% of its industry peers.
In the last couple of years the Gross Margin of DRI has declined.
Industry RankSector Rank
OM 12%
PM (TTM) 9.24%
GM 21.03%
OM growth 3Y26.49%
OM growth 5Y3.44%
PM growth 3YN/A
PM growth 5Y4.88%
GM growth 3Y3.26%
GM growth 5Y-1.68%

5

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so DRI is still creating some value.
DRI has less shares outstanding than it did 1 year ago.
The number of shares outstanding for DRI has been reduced compared to 5 years ago.
The debt/assets ratio for DRI is higher compared to a year ago.

2.2 Solvency

DRI has an Altman-Z score of 2.52. 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 2.52 is fine compared to the rest of the industry. DRI outperforms 75.37% of its industry peers.
The Debt to FCF ratio of DRI is 1.60, which is an excellent value as it means it would take DRI, only 1.60 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of DRI (1.60) is better than 86.57% of its industry peers.
A Debt/Equity ratio of 0.70 indicates that DRI is somewhat dependend on debt financing.
DRI has a better Debt to Equity ratio (0.70) than 67.16% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.7
Debt/FCF 1.6
Altman-Z 2.52
ROIC/WACC1.51
WACC8.44%

2.3 Liquidity

DRI has a Current 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's Current ratio of 0.39 is on the low side compared to the rest of the industry. DRI is outperformed by 89.55% of its industry peers.
A Quick Ratio of 0.25 indicates that DRI may have some problems paying its short term obligations.
DRI's Quick ratio of 0.25 is on the low side compared to the rest of the industry. DRI is outperformed by 94.78% of its industry peers.
Industry RankSector Rank
Current Ratio 0.39
Quick Ratio 0.25

5

3. Growth

3.1 Past

DRI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.14%, which is quite good.
DRI shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.58% yearly.
Looking at the last year, DRI shows a quite strong growth in Revenue. The Revenue has grown by 8.53% in the last year.
Measured over the past years, DRI shows a small growth in Revenue. The Revenue has been growing by 5.35% on average per year.
EPS 1Y (TTM)15.14%
EPS 3Y36.12%
EPS 5Y10.58%
EPS growth Q2Q11.97%
Revenue 1Y (TTM)8.53%
Revenue growth 3Y10.34%
Revenue growth 5Y5.35%
Revenue growth Q2Q6.77%

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 8.16% on average per year.
Based on estimates for the next years, DRI will show a small growth in Revenue. The Revenue will grow by 5.63% on average per year.
EPS Next Y12.49%
EPS Next 2Y10.9%
EPS Next 3Y10.84%
EPS Next 5Y8.16%
Revenue Next Year9.85%
Revenue Next 2Y7.63%
Revenue Next 3Y7.03%
Revenue Next 5Y5.63%

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 stable: in the next years the growth will be about the same than in the last years.

4

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 18.96 indicates a rather expensive valuation of DRI.
Based on the Price/Earnings ratio, DRI is valued a bit cheaper than the industry average as 73.88% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of DRI to the average of the S&P500 Index (26.42), we can say DRI is valued slightly cheaper.
The Price/Forward Earnings ratio is 17.06, which indicates a rather expensive current valuation of DRI.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DRI indicates a somewhat cheap valuation: DRI is cheaper than 72.39% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.74, DRI is valued a bit cheaper.
Industry RankSector Rank
PE 18.96
Fwd PE 17.06

4.2 Price Multiples

DRI's Enterprise Value to EBITDA is on the same level as the industry average.
72.39% of the companies in the same industry are more expensive than DRI, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 20.89
EV/EBITDA 11.83

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)1.52
PEG (5Y)1.79
EPS Next 2Y10.9%
EPS Next 3Y10.84%

5

5. Dividend

5.1 Amount

DRI has a Yearly Dividend Yield of 3.20%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.48, DRI pays a better dividend. On top of this DRI pays more dividend than 91.04% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, DRI pays a bit more dividend than the S&P500 average.
Industry RankSector Rank
Dividend Yield 3.2%

5.2 History

On average, the dividend of DRI grows each year by 13.83%, which is quite nice.
DRI has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)13.83%
Div Incr Years0
Div Non Decr Years0

5.3 Sustainability

DRI pays out 59.79% of its income as dividend. This is a bit on the high side, but may be sustainable.
DRI's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP59.79%
EPS Next 2Y10.9%
EPS Next 3Y10.84%

DARDEN RESTAURANTS INC

NYSE:DRI (3/28/2024, 9:58:21 AM)

167.208

+0.24 (+0.14%)

Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap19.97B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 3.2%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 18.96
Fwd PE 17.06
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.52
PEG (5Y)1.79
Profitability
Industry RankSector Rank
ROA 9.11%
ROE 47.44%
ROCE
ROIC
ROICexc
ROICexgc
OM 12%
PM (TTM) 9.24%
GM 21.03%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.99
Health
Industry RankSector Rank
Debt/Equity 0.7
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 0.39
Quick Ratio 0.25
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)15.14%
EPS 3Y36.12%
EPS 5Y
EPS growth Q2Q
EPS Next Y12.49%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)8.53%
Revenue growth 3Y10.34%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y