Darden Restaurants Inc's Dividend Analysis
Exploring the Sustainability and Growth of Darden Restaurants Inc's Dividends
Darden Restaurants Inc (NYSE:DRI) recently announced a dividend of $1.31 per share, payable on 2024-02-01, with the ex-dividend date set for 2024-01-09. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Darden Restaurants Inc's dividend performance and assess its sustainability.
What Does Darden Restaurants Inc Do?
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Darden Restaurants Inc is the largest restaurant operator in the U.S. full-service space, boasting consolidated revenue of $10.5 billion in fiscal 2023 which results in 3%-4% full-service market share according to NRA data and our calculations. The company oversees a diverse portfolio of 10 restaurant brands, including household names like Olive Garden and LongHorn Steakhouse. Darden Restaurants Inc's revenue streams are primarily from company-owned restaurants, with a small contribution from franchised restaurants and consumer-packaged goods sales. As of the end of fiscal 2023, Darden Restaurants Inc operated 1,914 restaurants across the United States.
A Glimpse at Darden Restaurants Inc's Dividend History
Darden Restaurants Inc has upheld a steady dividend payment track record since 1995, with dividends currently being distributed on a quarterly basis. Below is a chart that illustrates the annual Dividends Per Share to track historical trends.
Breaking Down Darden Restaurants Inc's Dividend Yield and Growth
Darden Restaurants Inc's current 12-month trailing dividend yield stands at 3.11%, with a 12-month forward dividend yield of 3.17%, indicating an anticipated increase in dividend payments over the next year. Over the past three years, Darden Restaurants Inc's annual dividend growth rate was a robust 22.40%, which decreased to 11.70% per year over a five-year period. The annual dividends per share growth rate over the past decade has been steady at 6.50%.
Considering Darden Restaurants Inc's dividend yield and five-year growth rate, the 5-year yield on cost for Darden Restaurants Inc stock is approximately 5.41% as of today.
The Sustainability Question: Payout Ratio and Profitability
The dividend payout ratio is a key metric for evaluating the sustainability of a company's dividend. Darden Restaurants Inc's payout ratio as of November 30, 2023, is 0.61, suggesting a balance between distributing earnings as dividends and retaining funds for future growth. The profitability rank of Darden Restaurants Inc is a strong 8 out of 10, reflecting good profitability prospects and consistent net profit over 9 of the past 10 years.
Growth Metrics: The Future Outlook
Darden Restaurants Inc's impressive growth rank of 8 out of 10 suggests a strong growth trajectory when compared to its competitors. The company's revenue model is robust, with a revenue per share and a 3-year revenue growth rate that outperforms approximately 77.3% of global competitors. Additionally, Darden Restaurants Inc's earnings have increased by an average of 60.40% per year over the past three years, outperforming about 94.78% of global competitors. The company also boasts a 5-year EBITDA growth rate of 12.40%, outperforming approximately 75.7% of global competitors.
Concluding Thoughts: Darden Restaurants Inc's Dividend Prospects
Considering Darden Restaurants Inc's consistent dividend payments, robust dividend growth rate, balanced payout ratio, strong profitability, and solid growth metrics, the company presents an attractive prospect for value investors seeking dividend income. The future outlook appears promising, and Darden Restaurants Inc is poised to maintain its commitment to returning value to shareholders. Will Darden Restaurants Inc continue to serve up appetizing dividends? Only time will tell, but the fundamentals certainly suggest a recipe for continued success. For those looking to expand their portfolio with high-dividend yield stocks, the High Dividend Yield Screener on GuruFocus could be an invaluable tool.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
