Hamlin Capital Management LLC Lowers Position in Darden Restaurants, Inc. $DRI

Key Points

• Hamlin Capital Management reduced its Darden Restaurants position by 3.3% in the second quarter, selling 28,453 shares and retaining 822,585 shares worth approximately $169.5 million.
• Darden reported quarterly earnings of $3.66 per share, slightly exceeding estimates, while revenue rose 13.7% year over year to $3.72 billion. The company also increased its quarterly dividend to $1.62, implying a 3.1% annualized yield.
• Analysts maintain a generally positive outlook, with a consensus “Moderate Buy” rating and an average price target of $228.88 versus the stock’s reported price of $208.51. However, insiders sold about $12.8 million of shares over the past three months.

Hamlin Capital Management LLC trimmed its holdings in shares of Darden Restaurants, Inc. (NYSE:DRI - Free Report) by 3.3% during the 2nd quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission (SEC). The institutional investor owned 822,585 shares of the restaurant operator's stock after selling 28,453 shares during the period. Darden Restaurants comprises about 3.8% of Hamlin Capital Management LLC's portfolio, making the stock its 13th largest position. Hamlin Capital Management LLC owned approximately 0.72% of Darden Restaurants worth $169,461,000 at the end of the most recent quarter.

Other institutional investors have also added to or reduced their stakes in the company. Wellington Management Group LLP lifted its position in shares of Darden Restaurants by 81.0% in the 4th quarter. Wellington Management Group LLP now owns 8,077,567 shares of the restaurant operator's stock worth $1,486,434,000 after purchasing an additional 3,613,781 shares during the period. Bank of America Corp DE increased its holdings in Darden Restaurants by 44.6% during the first quarter. Bank of America Corp DE now owns 3,212,283 shares of the restaurant operator's stock valued at $629,736,000 after buying an additional 991,230 shares during the period. Norges Bank bought a new position in Darden Restaurants in the fourth quarter worth approximately $144,483,000. Alyeska Investment Group L.P. bought a new position in Darden Restaurants in the fourth quarter worth approximately $113,301,000. Finally, Invesco Ltd. lifted its holdings in Darden Restaurants by 42.6% during the fourth quarter. Invesco Ltd. now owns 1,884,339 shares of the restaurant operator's stock worth $346,756,000 after buying an additional 563,237 shares during the period. Hedge funds and other institutional investors own 93.64% of the company's stock.

Insiders Place Their Bets

In other news, SVP Susan M. Connelly sold 2,226 shares of the business's stock in a transaction dated Wednesday, July 29th. The stock was sold at an average price of $208.17, for a total transaction of $463,386.42. Following the sale, the senior vice president owned 4,165 shares in the company, valued at approximately $867,028.05. The trade was a 34.83% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, CFO Rajesh Vennam sold 8,478 shares of the company's stock in a transaction dated Wednesday, July 29th. The shares were sold at an average price of $210.00, for a total transaction of $1,780,380.00. Following the transaction, the chief financial officer owned 8,569 shares in the company, valued at approximately $1,799,490. This trade represents a 49.73% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold a total of 61,321 shares of company stock worth $12,790,347 in the last three months. Insiders own 0.49% of the company's stock.

Darden Restaurants Stock Performance

Shares of DRI stock opened at $208.51 on Thursday. The business's fifty day simple moving average is $203.86 and its 200-day simple moving average is $203.08. The company has a market cap of $23.79 billion, a PE ratio of 20.09, a PEG ratio of 2.04 and a beta of 0.60. The company has a current ratio of 0.31, a quick ratio of 0.21 and a debt-to-equity ratio of 0.74. Darden Restaurants, Inc. has a 12-month low of $169.00 and a 12-month high of $220.65.

Darden Restaurants (NYSE:DRI - Get Free Report) last posted its quarterly earnings data on Thursday, June 25th. The restaurant operator reported $3.66 earnings per share for the quarter, topping analysts' consensus estimates of $3.63 by $0.03. Darden Restaurants had a return on equity of 57.44% and a net margin of 9.13%.The firm had revenue of $3.72 billion during the quarter, compared to analysts' expectations of $3.73 billion. During the same quarter last year, the firm earned $2.98 EPS. The business's quarterly revenue was up 13.7% on a year-over-year basis. Darden Restaurants has set its FY 2027 guidance at 11.100-11.350 EPS. Analysts expect that Darden Restaurants, Inc. will post 11.28 earnings per share for the current fiscal year.

Darden Restaurants Increases Dividend

The firm also recently declared a quarterly dividend, which was paid on Monday, August 3rd. Shareholders of record on Friday, July 10th were paid a $1.62 dividend. This represents a $6.48 dividend on an annualized basis and a yield of 3.1%. This is a boost from Darden Restaurants's previous quarterly dividend of $1.50. The ex-dividend date was Friday, July 10th. Darden Restaurants's dividend payout ratio (DPR) is 62.43%.

Wall Street Analysts Forecast Growth

A number of brokerages have recently issued reports on DRI. Piper Sandler lifted their price target on Darden Restaurants from $208.00 to $212.00 and gave the company a "neutral" rating in a report on Friday, June 26th. Bank of America upped their price objective on Darden Restaurants from $272.00 to $276.00 and gave the stock a "buy" rating in a research note on Friday, June 5th. Stephens raised their price objective on Darden Restaurants from $210.00 to $216.00 and gave the company an "equal weight" rating in a research report on Friday, June 26th. Argus boosted their target price on shares of Darden Restaurants from $240.00 to $245.00 and gave the stock a "buy" rating in a report on Tuesday, June 30th. Finally, Citigroup boosted their target price on shares of Darden Restaurants from $238.00 to $245.00 and gave the stock a "buy" rating in a report on Monday, June 15th. Seventeen research analysts have rated the stock with a Buy rating and ten have assigned a Hold rating to the company. According to MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and a consensus price target of $228.88.

About Darden Restaurants

Darden Restaurants, Inc is a multi-brand, full-service restaurant company headquartered in Orlando, Florida. The company owns and operates a portfolio of casual and fine-dining concepts that together serve millions of guests through company-owned and franchised locations. Its well-known brands include Olive Garden and LongHorn Steakhouse, alongside other dining concepts that span Italian, American, steakhouse and upscale casual formats.

Darden's restaurants provide a range of guest-facing services including dine-in, takeout, delivery and catering, and feature menus tailored to each brand's positioning—Italian-American fare at Olive Garden, steaks and grilled items at LongHorn, and more premium steakhouse and chef-driven offerings at its upscale concepts.

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