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 up 0.3%. By the end of trading, Darden Restaurants fell 51 cents (-1.1%) to $45.80 on heavy volume. Throughout the day, 3.5 million shares of Darden Restaurants exchanged hands as compared to its average daily volume of 1.4 million shares. The stock ranged in price between $45.41-$46.59 after having opened the day at $46.59 as compared to the previous trading day's close of $46.31. Other companies within the Leisure industry that declined today were: Burger King Worldwide ( BKW), down 5%, Dover Downs Gaming & Entertainment ( DDE), down 4.4%, Del Frisco's Restaurant Group ( DFRG), down 4%, and Denny's Corporation ( DENN), down 3.7%.
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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 $6.02 billion and is part of the services sector. The company has a P/E ratio of 12.8, below the S&P 500 P/E ratio of 17.7. Shares are up 2.7% year to date as of the close of trading on Tuesday. Currently there are nine analysts that rate Darden Restaurants a buy, two analysts rate it a sell, and 14 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, solid stock price performance, reasonable valuation levels, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins.

On the positive front, PokerTek ( PTEK), up 16.7%, Cosi ( COSI), up 15.8%, Nathans Famous ( NATH), up 8.4%, and Dover Motorsports ( DVD), up 5.2%, were all gainers within the leisure industry with Las Vegas Sands ( LVS) 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).

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