Del Taco Restaurants (NASDAQ:TACO) and Darden Restaurants (NYSE:DRI) are both retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, profitability, dividends and analyst recommendations.
Volatility and Risk
Del Taco Restaurants has a beta of 1.76, suggesting that its stock price is 76% more volatile than the S&P 500. Comparatively, Darden Restaurants has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500.
Valuation & Earnings
This table compares Del Taco Restaurants and Darden Restaurants’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Del Taco Restaurants||$512.95 million||0.59||-$118.29 million||$0.47||17.32|
|Darden Restaurants||$7.81 billion||1.55||-$52.40 million||$3.13||29.83|
Darden Restaurants has higher revenue and earnings than Del Taco Restaurants. Del Taco Restaurants is trading at a lower price-to-earnings ratio than Darden Restaurants, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
67.3% of Del Taco Restaurants shares are held by institutional investors. Comparatively, 88.7% of Darden Restaurants shares are held by institutional investors. 16.5% of Del Taco Restaurants shares are held by insiders. Comparatively, 1.0% of Darden Restaurants shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
This table compares Del Taco Restaurants and Darden Restaurants’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Del Taco Restaurants||-45.73%||3.61%||1.20%|
This is a breakdown of recent ratings and price targets for Del Taco Restaurants and Darden Restaurants, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Del Taco Restaurants||0||1||4||0||2.80|
Del Taco Restaurants currently has a consensus target price of $9.75, indicating a potential upside of 19.78%. Darden Restaurants has a consensus target price of $91.28, indicating a potential downside of 2.25%. Given Del Taco Restaurants’ stronger consensus rating and higher probable upside, research analysts clearly believe Del Taco Restaurants is more favorable than Darden Restaurants.
Darden Restaurants beats Del Taco Restaurants on 9 of the 14 factors compared between the two stocks.
Del Taco Restaurants Company Profile
Del Taco Restaurants, Inc. develops, franchises, owns, and operates Del Taco quick-service Mexican-American restaurants in the United States. The company's restaurants offer Mexican inspired and American classic dishes. As of December 10, 2018, it operated approximately 560 restaurants across 14 states. The company was founded in 1964 and is headquartered in Lake Forest, California.
Darden Restaurants Company Profile
Darden Restaurants, Inc., through its subsidiaries, owns and operates full-service restaurants in the United States and Canada. As of May 27, 2018, it owned and operated approximately 1,746 restaurants under the Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, Yard House, The Capital Grille, Bahama Breeze, Seasons 52, and Eddie V's brands. The company was founded in 1968 and is based in Orlando, Florida.
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