Time for a Refill at Darden Restaurants
Darden Restaurants, Inc. owns and operates full service restaurants in the United States and Canada. It operates restaurants under the Red Lobster, Olive Garden, LongHorn Steakhouse, The Capital Grille, Bahama Breeze, Seasons 52, Eddie V's Prime Seafood, and Wildfish Seafood Grille brand names. As of December 20, 2012, it owned and operated approximately 2,000 restaurants. The company was founded in 1968 and is headquartered in Orlando, Florida. [PostStockWidget stock_valuation="" pricetype="live" manual_date="Dec. 21, 2012, 2:04pm GMT" symbolcodes="'DRI'" symbolprices="59" div_align="right"]
DRI is trading at a low valuation that is consistent with low valuations that occurred in the stock throughout 2010 and 2011, it also has solid brands that have become household names. Note the steady growth in earnings (white line) since 1997
DRI trades at 12.7X earnings and pays a 4.4% dividend. Note the growth in dividends paid per share (DPS) in the lower pane of the stock chart below.
DRI’s Return on Capital (ROC) is 25.7% and it has an earnings yield of 7.9%. The market capitalization is $5.7 billion.
LOW VALUATION IN DARDEN RESTUARANTS AT $ 45.00 (DRI, $44.61)
The Purple Chips target is $54.00 in 12 to 18 months.
Note - if you own STAPLES (SPLS), we would switch SPLS (at last price) for DRI, which we consider to be a better quality cyclical stock.
