Vanguard Group Inc. Buys 25,930 Shares of Darden Restaurants, Inc. (NYSE:DRI)

Key Points

• Vanguard Group Inc. increased its holdings in Darden Restaurants by 0.2%, owning approximately 11.77% of the company, which is valued at about $2.86 billion.
• Darden Restaurants announced a $1 billion stock buyback program, representing 3.8% of its shares, which signals that the board believes the shares are undervalued.
• The company recently raised its quarterly dividend to $1.50 per share, up from $1.40, providing a 3.0% dividend yield for investors.

Vanguard Group Inc. increased its position in shares of Darden Restaurants, Inc. (NYSE:DRI - Free Report) by 0.2% in the 1st quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The institutional investor owned 13,770,371 shares of the restaurant operator's stock after acquiring an additional 25,930 shares during the quarter. Vanguard Group Inc. owned about 11.77% of Darden Restaurants worth $2,860,932,000 as of its most recent SEC filing.

Other large investors have also recently modified their holdings of the company. Wealth Enhancement Advisory Services LLC increased its stake in Darden Restaurants by 31.8% during the 1st quarter. Wealth Enhancement Advisory Services LLC now owns 15,230 shares of the restaurant operator's stock valued at $3,164,000 after purchasing an additional 3,677 shares in the last quarter. Choreo LLC increased its stake in Darden Restaurants by 46.0% during the 1st quarter. Choreo LLC now owns 16,248 shares of the restaurant operator's stock valued at $3,376,000 after purchasing an additional 5,119 shares in the last quarter. Principal Financial Group Inc. increased its stake in Darden Restaurants by 5.1% during the 1st quarter. Principal Financial Group Inc. now owns 162,340 shares of the restaurant operator's stock valued at $33,728,000 after purchasing an additional 7,902 shares in the last quarter. Golden State Wealth Management LLC increased its stake in Darden Restaurants by 12.4% during the 1st quarter. Golden State Wealth Management LLC now owns 924 shares of the restaurant operator's stock valued at $192,000 after purchasing an additional 102 shares in the last quarter. Finally, Kovitz Investment Group Partners LLC acquired a new position in Darden Restaurants during the 4th quarter valued at approximately $540,000. Institutional investors own 93.64% of the company's stock.

Insider Buying and Selling at Darden Restaurants

In related news, SVP Susan M. Connelly sold 4,735 shares of Darden Restaurants stock in a transaction that occurred on Tuesday, June 24th. The stock was sold at an average price of $223.78, for a total transaction of $1,059,598.30. Following the completion of the sale, the senior vice president directly owned 4,602 shares of the company's stock, valued at approximately $1,029,835.56. This trade represents a 50.71% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is accessible through the SEC website. Also, CFO Rajesh Vennam sold 5,780 shares of Darden Restaurants stock in a transaction that occurred on Tuesday, June 24th. The stock was sold at an average price of $222.22, for a total value of $1,284,431.60. Following the sale, the chief financial officer directly owned 4,555 shares of the company's stock, valued at approximately $1,012,212.10. The trade was a 55.93% decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders sold a total of 45,727 shares of company stock worth $10,022,232 in the last 90 days. Company insiders own 0.49% of the company's stock.

Darden Restaurants Stock Up 0.9%

Shares of NYSE DRI traded up $1.82 during mid-day trading on Wednesday, reaching $206.95. 341,143 shares of the company's stock were exchanged, compared to its average volume of 1,332,215. The firm has a market capitalization of $24.13 billion, a price-to-earnings ratio of 23.30, a PEG ratio of 1.85 and a beta of 0.75. The company has a current ratio of 0.42, a quick ratio of 0.28 and a debt-to-equity ratio of 0.92. The business has a fifty day simple moving average of $212.72 and a 200 day simple moving average of $203.88. Darden Restaurants, Inc. has a twelve month low of $140.50 and a twelve month high of $228.27.

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

Darden Restaurants declared that its Board of Directors has initiated a stock buyback plan on Friday, June 20th that allows the company to repurchase $1.00 billion in outstanding shares. This repurchase authorization allows the restaurant operator to buy up to 3.8% of its stock through open market purchases. Stock repurchase plans are often an indication that the company's board believes its stock is undervalued.

Darden Restaurants Increases Dividend

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

Analysts Set New Price Targets

A number of research firms have recently weighed in on DRI. Melius Research upgraded shares of Darden Restaurants to a "hold" rating in a research note on Monday, July 14th. UBS Group increased their target price on shares of Darden Restaurants from $225.00 to $245.00 and gave the company a "buy" rating in a research report on Monday, June 16th. Robert W. Baird lifted their price target on shares of Darden Restaurants from $218.00 to $230.00 and gave the company a "neutral" rating in a research report on Monday, June 23rd. Barclays raised their price objective on shares of Darden Restaurants from $235.00 to $255.00 and gave the company an "overweight" rating in a research note on Monday, June 23rd. Finally, Jefferies Financial Group upgraded shares of Darden Restaurants from an "underperform" rating to a "hold" rating and boosted their price objective for the stock from $165.00 to $210.00 in a research report on Friday, June 13th. Twelve equities research analysts have rated the stock with a hold rating and sixteen have issued a buy rating to the stock. Based on data from MarketBeat, Darden Restaurants currently has a consensus 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.