Darden Restaurants (DRI) vs. One Group Hospitality (STKS) Head-To-Head Analysis

Darden Restaurants (NYSE: DRI) and One Group Hospitality (NASDAQ:STKS) are both retail/wholesale companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, institutional ownership, valuation, earnings and analyst recommendations.

Insider & Institutional Ownership

90.4% of Darden Restaurants shares are owned by institutional investors. Comparatively, 8.5% of One Group Hospitality shares are owned by institutional investors. 0.6% of Darden Restaurants shares are owned by company insiders. Comparatively, 35.9% of One Group Hospitality shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for Darden Restaurants and One Group Hospitality, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Darden Restaurants 1 14 10 0 2.36
One Group Hospitality 0 0 0 0 N/A

Darden Restaurants currently has a consensus target price of $97.14, indicating a potential upside of 13.08%. Given Darden Restaurants’ higher probable upside, analysts plainly believe Darden Restaurants is more favorable than One Group Hospitality.

Earnings and Valuation

This table compares Darden Restaurants and One Group Hospitality’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Darden Restaurants $7.17 billion 1.47 $479.10 million $3.90 21.90
One Group Hospitality $72.41 million 0.97 -$16.68 million ($0.80) -3.49

Darden Restaurants has higher revenue and earnings than One Group Hospitality. One Group Hospitality is trading at a lower price-to-earnings ratio than Darden Restaurants, indicating that it is currently the more affordable of the two stocks.

Dividends

Darden Restaurants pays an annual dividend of $2.52 per share and has a dividend yield of 3.0%. One Group Hospitality does not pay a dividend. Darden Restaurants pays out 64.6% of its earnings in the form of a dividend.

Profitability

This table compares Darden Restaurants and One Group Hospitality’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Darden Restaurants 6.46% 26.24% 10.27%
One Group Hospitality -25.48% -68.30% -7.44%

Risk & Volatility

Darden Restaurants has a beta of 0.22, indicating that its share price is 78% less volatile than the S&P 500. Comparatively, One Group Hospitality has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500.

Summary

Darden Restaurants beats One Group Hospitality on 11 of the 14 factors compared between the two stocks.

About Darden Restaurants

Darden Restaurants, Inc., through its subsidiaries, owns and operates full-service restaurants in the United States and Canada. As of June 27, 2017, it owned and operated approximately 1,700 restaurants under the Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, and Eddie V's brands. The company was founded in 1968 and is based in Orlando, Florida.

About One Group Hospitality

The ONE Group Hospitality, Inc., formerly Committed Capital Acquisition Corporation, is a hospitality company. The Company develops, owns and operates restaurants and lounges, and provides food and beverage services for hospitality venues, including hotels, casinos and other locations across the globe. It operates through three segments: owned STK units (STKs), F&B hospitality management agreements (F&B), and Other concepts (Other). Its STKs segment consists of leased restaurant locations. Its F&B segment consists of management agreements, in which the Company operates the food and beverage services in hotels or casinos and could include an STK. Its Other segment includes owned non-STK leased locations. Its restaurant brand is STK, a multi-unit steakhouse concept with locations in metropolitan cities around the globe. Its F&B hospitality management services include developing, managing and operating restaurants, bars, rooftop lounges, pools, banqueting and catering facilities.

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