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Darden Restaurants

DRI
52
Restaurants · Consumer Cyclical
Price
$198.42
-2.79 (-1.39%)
Market Cap
$22.73B
Winston Score
52
Winston is curious
Mixed quality — meaningful strengths and weaknesses.

Share count falling — buybacks

10.7% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 129.0M (2022) → 115.2M (2026)

Darden Restaurants owns and operates a large portfolio of full-service restaurant chains across the United States and Canada. Its most well-known brands include Olive Garden, LongHorn Steakhouse, and fine dining chains like The Capital Grille and Eddie V's. Darden is one of the largest full-service restaurant companies in the United States, serving everyday diners as well as customers looking for a more upscale meal.

Darden makes money by selling food and drinks directly to customers at its restaurants, which it mostly owns and operates rather than franchises. The company runs over 1,900 locations, almost entirely in North America, and its scale gives it an advantage in purchasing ingredients and managing costs. The main risk Darden faces is that when the economy slows down and consumers feel financial pressure, people tend to cut back on eating out, which can hurt sales across all of its brands.

Winston Score History

Politician Trades

19 trades / 12mo

11 Congressional buys and 8 sells on DRI in the last 12 months.

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Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+5.9% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

-3.6% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$0/ year

0.0% of revenue

Below sector average (4%)

Research and development spending

Insider Activity

0.4%ownership

Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$249M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

Darden Restaurants is growing revenue at 6% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin
18.0%
Thin — 18.0% gross margin
Operating Margin
13.2%
Healthy — 13.2% operating margin
ROCE
9.7%
Below par — 9.7% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales YoY
+8.5%
Steady sales growth (8.5% YoY)
EPS YoY
+8.9%
Earnings growing (8.9% YoY)

Single-digit earnings growth — steady but not exciting.

EPS Consistency
8/8 quarters
Every recent quarter grew earnings vs last year

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Cash Flow

Cash Conversion
169%
Turns 169% of profit into real cash
FCF Margin
11.3%
Modest free cash flow (11.3%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity
1.16
Elevated debt (1.16)
Interest Cover
8.24x
Comfortably covers interest (8.2x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)
19.7x
Fair value — P/E 19.7

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward
+2.5
GROWING
Earnings expected to grow — slightly cheaper on forward P/E

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Dividends

Dividend Yield
2.77%
Moderate income — 2.77% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend Growth
+7.1%
Dividend growing modestly (7.1% YoY)

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