Darden Restaurants Inc (DRI): Today's Featured Leisure Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Darden Restaurants ( DRI) pushed the Leisure industry lower today making it today's featured Leisure laggard. The industry as a whole closed the day down 0.6%. By the end of trading, Darden Restaurants fell 57 cents (-1.1%) to $52.63 on light volume. Throughout the day, 794,641 shares of Darden Restaurants exchanged hands as compared to its average daily volume of 1.3 million shares. The stock ranged in price between $52.56-$53.62 after having opened the day at $53.47 as compared to the previous trading day's close of $53.20. Other companies within the Leisure industry that declined today were: Jamba ( JMBA), down 9.4%, Luby's ( LUB), down 5.4%, Lakes Entertainment ( LACO), down 4.7%, and Boyd Gaming Corporation ( BYD), down 4.2%.
  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

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. Darden Restaurants has a market cap of $6.77 billion and is part of the services sector. The company has a P/E ratio of 14.4, below the S&P 500 P/E ratio of 17.7. Shares are up 15.4% year to date as of the close of trading on Thursday. Currently there are 12 analysts that rate Darden Restaurants a buy, one analyst rates it a sell, and 13 rate it a hold.

TheStreet Ratings rates Darden Restaurants as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, reasonable valuation levels, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

On the positive front, Priceline.com ( PCLN), up 8.3%, Empire Resorts ( NYNY), up 7.2%, Country Style Cooking Restaurant Chain ( CCSC), up 4.3%, and Nevada Gold & Casinos ( UWN), up 3.4%, were all gainers within the leisure industry with Starbucks Corporation ( SBUX) being today's featured leisure industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the leisure industry could consider PowerShares Dynamic Leisure&Entert ( PEJ) while those bearish on the leisure industry could consider ProShares Ultra Sht Consumer Services ( SCC).

FREE for a limited time only: Get TheStreet Ratings #1 Stock Report NOW!.
null

If you liked this article you might like

Eating McDonald's Stock Might Make You Sick

Investors in Restaurant Stocks Still Need Strong Stomachs

Olive Garden Takes Its Never Ending Pasta Pass to a Whole New $200 Level

Hurricane Irma Is Causing Destruction to Restaurant Stocks

Did Applebee's Ever Have a Shot With Millennials?