Contrasting Darden Restaurants (DRI) and Bloomin’ Brands (BLMN)
Darden Restaurants (NYSE: DRI) and Bloomin’ Brands (NASDAQ:BLMN) are both retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, earnings, analyst recommendations, valuation and risk.
This is a breakdown of current ratings and recommmendations for Darden Restaurants and Bloomin’ Brands, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Darden Restaurants presently has a consensus price target of $84.48, suggesting a potential upside of 7.54%. Bloomin’ Brands has a consensus price target of $20.63, suggesting a potential upside of 23.28%. Given Bloomin’ Brands’ higher probable upside, analysts clearly believe Bloomin’ Brands is more favorable than Darden Restaurants.
This table compares Darden Restaurants and Bloomin’ Brands’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
88.8% of Darden Restaurants shares are held by institutional investors. 0.6% of Darden Restaurants shares are held by insiders. Comparatively, 7.0% of Bloomin’ Brands shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Darden Restaurants pays an annual dividend of $2.52 per share and has a dividend yield of 3.2%. Bloomin’ Brands pays an annual dividend of $0.32 per share and has a dividend yield of 1.9%. Darden Restaurants pays out 66.1% of its earnings in the form of a dividend. Bloomin’ Brands pays out 35.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Valuation & Earnings
This table compares Darden Restaurants and Bloomin’ Brands’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Darden Restaurants||$7.17 billion||1.37||$940.00 million||$3.81||20.62|
|Bloomin’ Brands||$4.19 billion||0.39||$402.41 million||$0.90||18.59|
Darden Restaurants has higher revenue and earnings than Bloomin’ Brands. Bloomin’ Brands is trading at a lower price-to-earnings ratio than Darden Restaurants, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Darden Restaurants has a beta of 0.27, suggesting that its stock price is 73% less volatile than the S&P 500. Comparatively, Bloomin’ Brands has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500.
Darden Restaurants beats Bloomin’ Brands on 11 of the 16 factors compared between the two stocks.
Darden Restaurants Company Profile
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.
Bloomin’ Brands Company Profile
Bloomin’ Brands, Inc. is a holding company. The Company owns and operates casual, upscale casual and fine dining restaurants. The Company operates through two segments: U.S. and International. The U.S. segment includes all brands operating in the United States. The International segment includes brands operating outside the United States. As of December 25, 2016, the Company had a portfolio of four restaurant concepts: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill, and Fleming’s Prime Steakhouse & Wine Bar. OSI Restaurant Partners, LLC (OSI) is the Company’s primary operating entity. New Private Restaurant Properties, LLC (PRP), an indirect subsidiary of the Company, leases the Company-owned restaurant properties to OSI’s subsidiaries. As of December 25, 2016, the Company owned and operated 1,276 restaurants and franchised 240 restaurants across 48 states, Puerto Rico, Guam and 20 countries.
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