CCM Investment Group LLC Purchases New Shares in Darden Restaurants, Inc. (NYSE:DRI)

Key Points

• CCM Investment Group LLC acquired 7,194 shares of Darden Restaurants, valued at approximately $1,476,000, indicating growing institutional interest.
• Darden announced a $1 billion stock buyback program, showing management's confidence in the company’s stock valuation.
• Recent earnings results indicated a 10.6% revenue increase year-over-year, with reported EPS of $2.98, slightly beating analyst expectations.

CCM Investment Group LLC acquired a new position in Darden Restaurants, Inc. (NYSE:DRI - Free Report) in the 1st quarter, according to its most recent Form 13F filing with the SEC. The institutional investor acquired 7,194 shares of the restaurant operator's stock, valued at approximately $1,476,000.

Several other hedge funds have also recently bought and sold shares of DRI. Federated Hermes Inc. lifted its stake in Darden Restaurants by 31.1% in the 4th quarter. Federated Hermes Inc. now owns 25,925 shares of the restaurant operator's stock worth $4,840,000 after acquiring an additional 6,152 shares in the last quarter. F M Investments LLC grew its stake in Darden Restaurants by 409.6% in the fourth quarter. F M Investments LLC now owns 11,232 shares of the restaurant operator's stock valued at $2,097,000 after purchasing an additional 9,028 shares in the last quarter. Sterling Capital Management LLC grew its stake in Darden Restaurants by 31.7% in the fourth quarter. Sterling Capital Management LLC now owns 4,330 shares of the restaurant operator's stock valued at $808,000 after purchasing an additional 1,043 shares in the last quarter. Rockefeller Capital Management L.P. grew its stake in Darden Restaurants by 0.7% in the fourth quarter. Rockefeller Capital Management L.P. now owns 19,439 shares of the restaurant operator's stock valued at $3,627,000 after purchasing an additional 144 shares in the last quarter. Finally, Crux Wealth Advisors purchased a new position in Darden Restaurants in the fourth quarter valued at about $810,000. 93.64% of the stock is owned by hedge funds and other institutional investors.

Darden Restaurants Price Performance

Shares of NYSE:DRI traded down $0.14 during midday trading on Thursday, reaching $206.79. 394,331 shares of the company's stock were exchanged, compared to its average volume of 1,330,304. The company's 50 day simple moving average is $212.54 and its two-hundred day simple moving average is $203.90. The firm has a market capitalization of $24.11 billion, a PE ratio of 23.29, a price-to-earnings-growth ratio of 1.89 and a beta of 0.75. Darden Restaurants, Inc. has a 12 month low of $141.82 and a 12 month high of $228.27. The company has a debt-to-equity ratio of 0.92, a quick ratio of 0.28 and a current ratio of 0.42.

Darden Restaurants (NYSE:DRI - Get Free Report) last released its quarterly earnings data on Friday, June 20th. The restaurant operator reported $2.98 EPS for the quarter, topping analysts' consensus estimates of $2.97 by $0.01. The company had revenue of $3.27 billion during the quarter, compared to the consensus estimate of $3.25 billion. Darden Restaurants had a net margin of 8.69% and a return on equity of 51.81%. The firm's revenue for the quarter was up 10.6% compared to the same quarter last year. During the same period last year, the firm earned $2.65 EPS. Equities research analysts expect that Darden Restaurants, Inc. will post 9.52 earnings per share for the current fiscal year.

Darden Restaurants declared that its board has initiated a share buyback plan on Friday, June 20th that allows the company to repurchase $1.00 billion in shares. This repurchase authorization allows the restaurant operator to purchase up to 3.8% of its shares through open market purchases. Shares repurchase plans are typically a sign that the company's leadership believes its stock is undervalued.

Darden Restaurants Increases Dividend

The company also recently announced a quarterly dividend, which was paid on Friday, August 1st. Stockholders of record on Thursday, July 10th were issued a $1.50 dividend. This represents a $6.00 annualized dividend and a dividend yield of 2.9%. The ex-dividend date of this dividend was Thursday, July 10th. This is a positive change from Darden Restaurants's previous quarterly dividend of $1.40. Darden Restaurants's payout ratio is currently 67.57%.

Insiders Place Their Bets

In other news, insider Todd Burrowes sold 13,569 shares of the company's stock in a transaction dated Monday, June 30th. The shares were sold at an average price of $216.45, for a total value of $2,937,010.05. Following the sale, the insider owned 46,327 shares of the company's stock, valued at approximately $10,027,479.15. This represents a 22.65% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, SVP Matthew R. Broad sold 733 shares of the company's stock in a transaction dated Tuesday, July 1st. The stock was sold at an average price of $218.50, for a total transaction of $160,160.50. Following the completion of the sale, the senior vice president directly owned 14,367 shares in the company, valued at approximately $3,139,189.50. The trade was a 4.85% decrease in their position. The disclosure for this sale can be found here. Insiders have sold 45,727 shares of company stock worth $10,022,232 in the last quarter. 0.49% of the stock is owned by corporate insiders.

Analyst Ratings Changes

DRI has been the topic of a number of recent research reports. Bank of America boosted their target price on Darden Restaurants from $252.00 to $253.00 and gave the company a "buy" rating in a research note on Monday, June 23rd. Raymond James Financial boosted their target price on Darden Restaurants from $230.00 to $240.00 and gave the company an "outperform" rating in a research note on Monday, June 23rd. Evercore ISI raised their target price on Darden Restaurants from $230.00 to $250.00 and gave the company an "outperform" rating in a report on Monday, June 16th. Robert W. Baird raised their target price on Darden Restaurants from $218.00 to $230.00 and gave the company a "neutral" rating in a report on Monday, June 23rd. Finally, Oppenheimer raised their target price on Darden Restaurants from $230.00 to $250.00 and gave the company an "outperform" rating in a report on Wednesday, June 18th. Twelve research analysts have rated the stock with a hold rating and sixteen have issued a buy rating to the company. Based on data from MarketBeat.com, Darden Restaurants has an average rating of "Moderate Buy" and an average price target of $225.19.

Darden Restaurants Company Profile

Darden Restaurants, Inc, together with its subsidiaries, owns and operates full-service restaurants in the United States and Canada. It operates under Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, Eddie V's Prime Seafood, and Capital Burger brand names.