DARDEN RESTAURANTS INC (DRI) Stock Fundamental Analysis
NYSE:DRI - New York Stock Exchange, Inc. - US2371941053 - Common Stock - Currency: USD
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. Both the profitability and the financial health of DRI get a neutral evaluation. Nothing too spectacular is happening here. DRI is not valued too expensively and it also shows a decent growth rate.
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.
Each year in the past 5 years DRI has been profitable.
In the past 5 years DRI always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 8.34%, DRI belongs to the best of the industry, outperforming 80.15% of the companies in the same industry.
Looking at the Return On Equity, with a value of 45.41%, DRI belongs to the top of the industry, outperforming 92.37% of the companies in the same industry.
The Return On Invested Capital of DRI (12.03%) is better than 78.63% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for DRI is below the industry average of 15.80%.
| 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
With a decent Profit Margin value of 8.69%, DRI is doing good in the industry, outperforming 70.23% of the companies in the same industry.
DRI's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 11.69%, DRI is in the better half of the industry, outperforming 63.36% of the companies in the same industry.
In the last couple of years the Operating Margin of DRI has grown nicely.
With a Gross Margin value of 21.88%, DRI is not doing good in the industry: 84.73% of the companies in the same industry are doing better.
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so DRI is still creating some value.
The number of shares outstanding for DRI has been reduced compared to 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
An Altman-Z score of 2.61 indicates that DRI is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.61, DRI is in the better half of the industry, outperforming 68.70% of the companies in the same industry.
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's Debt to FCF ratio of 3.64 is amongst the best of the industry. DRI outperforms 81.68% of its industry peers.
DRI has a Debt/Equity ratio of 1.61. This is a high value indicating a heavy dependency on external financing.
DRI has a Debt to Equity ratio (1.61) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.61 | ||
| Debt/FCF | 3.64 | ||
| Altman-Z | 2.61 |
ROIC/WACC1.33
WACC9.06%
2.3 Liquidity
A Current Ratio of 0.42 indicates that DRI may have some problems paying its short term obligations.
DRI's Current ratio of 0.42 is on the low side compared to the rest of the industry. DRI is outperformed by 80.92% of its industry peers.
A Quick Ratio of 0.28 indicates that DRI may have some problems paying its short term obligations.
DRI has a Quick ratio of 0.28. This is amonst the worse of the industry: DRI underperforms 86.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.42 | ||
| Quick Ratio | 0.28 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.54% over the past year.
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.
Looking at the last year, DRI shows a small growth in Revenue. The Revenue has grown by 6.03% 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)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
The Earnings Per Share is expected to grow by 8.54% on average over the next years. This is quite good.
The Revenue is expected to grow by 5.43% on average over the next years.
EPS Next Y12.94%
EPS Next 2Y10.03%
EPS Next 3Y9.68%
EPS Next 5Y8.54%
Revenue Next Year8.29%
Revenue Next 2Y5.99%
Revenue Next 3Y5.74%
Revenue Next 5Y5.43%
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
DRI is valuated rather expensively with a Price/Earnings ratio of 21.49.
Based on the Price/Earnings ratio, DRI is valued a bit cheaper than 68.70% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.82. DRI is around the same levels.
With a Price/Forward Earnings ratio of 19.03, DRI is valued on the expensive side.
DRI's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. DRI is cheaper than 63.36% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of DRI to the average of the S&P500 Index (35.24), we can say DRI is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.49 | ||
| Fwd PE | 19.03 |
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 71.76% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.42 | ||
| EV/EBITDA | 14.28 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
DRI has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.66
PEG (5Y)0.87
EPS Next 2Y10.03%
EPS Next 3Y9.68%
5. Dividend
5.1 Amount
DRI has a Yearly Dividend Yield of 2.77%.
DRI's Dividend Yield is rather good when compared to the industry average which is at 7.18. DRI pays more dividend than 83.21% of the companies in the same industry.
DRI's Dividend Yield is comparable with the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.77% |
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
62.74% of the earnings are spent on dividend by DRI. This is not a sustainable payout ratio.
DRI's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP62.74%
EPS Next 2Y10.03%
EPS Next 3Y9.68%
205.41
-1.94 (-0.94%)
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 Cap24.04B
Analysts77.14
Price Target237.25 (15.5%)
Short Float %3.63%
Short Ratio3.18
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.77% |
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)3.9%
PT rev (3m)10.95%
EPS NQ rev (1m)0.03%
EPS NQ rev (3m)0.72%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.34%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.03%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-0.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.49 | ||
| Fwd PE | 19.03 | ||
| P/S | 1.99 | ||
| P/FCF | 23.42 | ||
| P/OCF | 14.15 | ||
| P/B | 10.4 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.28 |
EPS(TTM)9.56
EY4.65%
EPS(NY)10.8
Fwd EY5.26%
FCF(TTM)8.77
FCFY4.27%
OCF(TTM)14.51
OCFY7.07%
SpS103.19
BVpS19.75
TBVpS-6.77
PEG (NY)1.66
PEG (5Y)0.87
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 | 2.61 |
F-Score6
WACC9.06%
ROIC/WACC1.33
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 2Y10.03%
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 Year8.29%
Revenue Next 2Y5.99%
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%