Darden Restaurants (NYSE: DRI) is one of 44 publicly-traded companies in the “Restaurants & Bars” industry, but how does it compare to its competitors? We will compare Darden Restaurants to related businesses based on the strength of its profitability, analyst recommendations, earnings, risk, valuation, institutional ownership and dividends.

Insider & Institutional Ownership

89.6% of Darden Restaurants shares are held by institutional investors. Comparatively, 68.8% of shares of all “Restaurants & Bars” companies are held by institutional investors. 0.6% of Darden Restaurants shares are held by company insiders. Comparatively, 20.6% of shares of all “Restaurants & Bars” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

Darden Restaurants has a beta of 0.25, indicating that its stock price is 75% less volatile than the S&P 500. Comparatively, Darden Restaurants’ competitors have a beta of 0.67, indicating that their average stock price is 33% less volatile than the S&P 500.

Profitability

This table compares Darden Restaurants and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Darden Restaurants 6.60% 26.06% 10.47%
Darden Restaurants Competitors 1.82% 12.53% 1.77%

Dividends

Darden Restaurants pays an annual dividend of $2.52 per share and has a dividend yield of 3.0%. Darden Restaurants pays out 65.1% of its earnings in the form of a dividend. As a group, “Restaurants & Bars” companies pay a dividend yield of 3.0% and pay out 61.0% of their earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent ratings for Darden Restaurants and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Darden Restaurants 1 14 9 0 2.33
Darden Restaurants Competitors 280 1575 2165 73 2.50

Darden Restaurants currently has a consensus target price of $87.29, indicating a potential upside of 5.62%. As a group, “Restaurants & Bars” companies have a potential upside of 11.91%. Given Darden Restaurants’ competitors stronger consensus rating and higher probable upside, analysts clearly believe Darden Restaurants has less favorable growth aspects than its competitors.

Valuation and Earnings

This table compares Darden Restaurants and its competitors revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Darden Restaurants $7.39 billion $975.90 million 21.35
Darden Restaurants Competitors $2.04 billion $349.42 million -3.38

Darden Restaurants has higher revenue and earnings than its competitors. Darden Restaurants is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Summary

Darden Restaurants beats its competitors on 8 of the 15 factors compared.

About Darden Restaurants

Darden Restaurants, Inc. is a full-service restaurant company. The Company owned and operated 1,536 restaurants through its subsidiaries in the United States and Canada, as of May 29, 2016. The Company’s segments include Olive Garden, LongHorn Steakhouse, Fine Dining (which includes The Capital Grille, and Eddie V’s Prime Seafood and Wildfish Seafood Grille (Eddie V’s)) and Other Business (which includes Yard House, Seasons 52, Bahama Breeze, consumer-packaged goods and franchise revenues). As of May 29, 2016, the Company also had 50 restaurants operated by independent third parties pursuant to area development and franchise agreements. Olive Garden’s menu includes a range of authentic Italian foods featuring fresh ingredients and a selection of imported Italian wines. LongHorn Steakhouse restaurants feature a range of menu items, including fresh steaks and chicken, as well as salmon, shrimp, ribs, pork chops, burgers and prime rib.

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