Analyzing Bravo Brio Restaurant Group (BBRG) and Darden Restaurants (DRI)

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Bravo Brio Restaurant Group (NYSE: DRI) and Darden Restaurants (NYSE:DRI) are both retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.

Dividends

Darden Restaurants pays an annual dividend of $2.52 per share and has a dividend yield of 2.1%. Bravo Brio Restaurant Group does not pay a dividend. Darden Restaurants pays out 52.4% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Bravo Brio Restaurant Group and Darden Restaurants’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bravo Brio Restaurant Group $407.61 million 0.15 -$9.76 million $0.22 18.41
Darden Restaurants $8.08 billion 1.79 $596.00 million $4.81 24.38

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

Profitability

This table compares Bravo Brio Restaurant Group and Darden Restaurants’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bravo Brio Restaurant Group -3.86% -15.00% -2.55%
Darden Restaurants 7.38% 29.02% 11.30%

Institutional & Insider Ownership

34.4% of Bravo Brio Restaurant Group shares are owned by institutional investors. Comparatively, 89.5% of Darden Restaurants shares are owned by institutional investors. 7.5% of Bravo Brio Restaurant Group shares are owned by company insiders. Comparatively, 0.7% of Darden Restaurants 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 Recommendations

This is a summary of current ratings and target prices for Bravo Brio Restaurant Group and Darden Restaurants, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bravo Brio Restaurant Group 1 1 0 0 1.50
Darden Restaurants 0 9 14 0 2.61

Bravo Brio Restaurant Group presently has a consensus target price of $2.25, suggesting a potential downside of 44.44%. Darden Restaurants has a consensus target price of $110.05, suggesting a potential downside of 6.16%. Given Darden Restaurants’ stronger consensus rating and higher probable upside, analysts clearly believe Darden Restaurants is more favorable than Bravo Brio Restaurant Group.

Volatility and Risk

Bravo Brio Restaurant Group has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500. Comparatively, Darden Restaurants has a beta of 0.15, suggesting that its share price is 85% less volatile than the S&P 500.

Summary

Darden Restaurants beats Bravo Brio Restaurant Group on 13 of the 16 factors compared between the two stocks.

Bravo Brio Restaurant Group Company Profile

Bravo Brio Restaurant Group, Inc. owns and operates Italian restaurants in the United States. It operates full-service Italian restaurants under the BRAVO! Cucina Italiana brand name; Italian chophouse restaurants under the BRIO Tuscan Grille brand name; and full-service American-French bistro restaurant under the Bon Vie brand name. The company's restaurants primarily offer Italian food and wine. As of December 31, 2017, it operated 49 BRAVO! restaurants, 64 BRIO restaurants, and 1 Bon Vie restaurant in 32 states. The company was formerly known as Bravo Development, Inc. and changed its name to Bravo Brio Restaurant Group, Inc. in June 2010. Bravo Brio Restaurant Group, Inc. was incorporated in 1987 and is based in Columbus, Ohio.

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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