DARDEN RESTAURANTS INC (DRI) Stock Fundamental Analysis
USA - NYSE:DRI - US2371941053 - Common Stock
193.18 USD
-0.31 (-0.16%)
193.18 USD
0 (0%)
DRI gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 135 industry peers in the Hotels, Restaurants & Leisure industry. DRI has an average financial health and profitability rating. DRI has a decent growth rate and is not valued too expensively.
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.
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 8.62%, DRI belongs to the top of the industry, outperforming 82.22% of the companies in the same industry.
Looking at the Return On Equity, with a value of 49.43%, DRI belongs to the top of the industry, outperforming 93.33% of the companies in the same industry.
DRI has a Return On Invested Capital of 12.01%. This is in the better half of the industry: DRI outperforms 78.52% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DRI is below the industry average of 15.70%.
| 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 better Profit Margin (8.90%) than 71.11% 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 62.96% of its industry peers.
DRI's Operating Margin has improved in the last couple of years.
DRI has a worse Gross Margin (21.86%) than 84.44% of its industry peers.
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so DRI is still creating some value.
Compared to 1 year ago, DRI has less shares outstanding
The number of shares outstanding for DRI has been reduced compared to 5 years ago.
DRI has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.48 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 2.48. This is in the better half of the industry: DRI outperforms 67.41% 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.
The Debt to FCF ratio of DRI (3.68) is better than 77.78% of its industry peers.
DRI has a Debt/Equity ratio of 1.76. This is a high value indicating a heavy dependency on external financing.
DRI's Debt to Equity ratio of 1.76 is in line compared to the rest of the industry. DRI outperforms 54.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.76 | ||
| Debt/FCF | 3.68 | ||
| Altman-Z | 2.48 |
ROIC/WACC1.36
WACC8.84%
2.3 Liquidity
DRI has a Current 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.
The Current ratio of DRI (0.40) is worse than 82.22% of its industry peers.
A Quick Ratio of 0.27 indicates that DRI may have some problems paying its short term obligations.
With a Quick ratio value of 0.27, DRI is not doing good in the industry: 86.67% of the companies in the same industry are doing better.
| 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.
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 8.30% in the last year.
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
DRI is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.68% yearly.
Based on estimates for the next years, DRI will show a small growth in Revenue. The Revenue will grow by 5.58% on average per year.
EPS Next Y12.31%
EPS Next 2Y9.8%
EPS Next 3Y9.7%
EPS Next 5Y8.68%
Revenue Next Year8.21%
Revenue Next 2Y6.01%
Revenue Next 3Y5.8%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 19.75, DRI is valued on the expensive side.
Based on the Price/Earnings ratio, DRI is valued a bit cheaper than 70.37% of the companies in the same industry.
DRI is valuated rather cheaply when we compare the Price/Earnings ratio to 27.86, which is the current average of the S&P500 Index.
DRI is valuated correctly with a Price/Forward Earnings ratio of 16.76.
DRI's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. DRI is cheaper than 70.37% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.32, DRI is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.75 | ||
| Fwd PE | 16.76 |
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 73.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.04 | ||
| EV/EBITDA | 13.23 |
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)1.6
PEG (5Y)0.8
EPS Next 2Y9.8%
EPS Next 3Y9.7%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.00%, DRI has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 6.99, DRI pays a better dividend. On top of this DRI pays more dividend than 83.70% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, DRI pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3% |
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.
The dividend of DRI decreased 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 2Y9.8%
EPS Next 3Y9.7%
193.18
-0.31 (-0.16%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners95.22%
Inst Owner Change0%
Ins Owners0.28%
Ins Owner Change9.94%
Market Cap22.47B
Analysts76.76
Price Target227.51 (17.77%)
Short Float %3.85%
Short Ratio3.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3% |
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)-4.11%
PT rev (3m)-0.36%
EPS NQ rev (1m)-4.76%
EPS NQ rev (3m)-4.92%
EPS NY rev (1m)-0.56%
EPS NY rev (3m)-0.81%
Revenue NQ rev (1m)-0.32%
Revenue NQ rev (3m)-0.19%
Revenue NY rev (1m)-0.16%
Revenue NY rev (3m)-0.56%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.75 | ||
| Fwd PE | 16.76 | ||
| P/S | 1.82 | ||
| P/FCF | 21.04 | ||
| P/OCF | 12.71 | ||
| P/B | 10.1 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.23 |
EPS(TTM)9.78
EY5.06%
EPS(NY)11.53
Fwd EY5.97%
FCF(TTM)9.18
FCFY4.75%
OCF(TTM)15.2
OCFY7.87%
SpS106.31
BVpS19.14
TBVpS-6.7
PEG (NY)1.6
PEG (5Y)0.8
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%
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 Turnover0.97
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 | 2.48 |
F-Score6
WACC8.84%
ROIC/WACC1.36
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 Y12.31%
EPS Next 2Y9.8%
EPS Next 3Y9.7%
EPS Next 5Y8.68%
Revenue 1Y (TTM)8.3%
Revenue growth 3Y7.84%
Revenue growth 5Y9.12%
Sales Q2Q%10.44%
Revenue Next Year8.21%
Revenue Next 2Y6.01%
Revenue Next 3Y5.8%
Revenue Next 5Y5.58%
EBIT growth 1Y5.74%
EBIT growth 3Y6.75%
EBIT growth 5Y26.36%
EBIT Next Year48.65%
EBIT Next 3Y17.97%
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%