Darling Ingredients’ Sales, Earnings Soar On Clean Energy Demand

Friday, March 12, 2021 | Kate Stalter
 Darling Ingredients’ Sales, Earnings Soar On Clean Energy DemandDarling Ingredients (NYSE: DAR) is a company that works magic: It transforms foodservice waste into fuel and other products.

As numerous states, as well as the federal government, are implementing new clean energy targets, demand for a service like Darlings is flying high.

The Irving, Texas-based company starts with materials such as meat and bone waste from slaughterhouses, used cooking oil from restaurants, and other waste from restaurants, bakeries and other food producers.

Darling takes those unwanted waste products and transforms them into fertilizers, pet foods, soaps, livestock feed and renewable diesel fuel, among other items.

With new government initiatives for clean and renewable energy, demand for waste materials is growing fast. Demand for Darlings rendering services is also soaring.

The company reported its fourth-quarter and full-year results on March 3.

Fourth-quarter earnings came in at $0.45 per share, down 51% from the year-earlier quarter, but topping analyst estimates of $0.41 per share.

Revenue of  $1.02 billion marked a year-over-year increase of 19%. Revenue also beat the consensus estimate of $905.2 million.

 Shuttered Biodiesel Plants

In its earnings call, the company discussed its 50% partnership in Diamond Green Diesel (DGD), the largest renewable diesel manufacturer in North America. Darling shifted its attention to this industry sector in 2020, closing biodiesel plants in Montreal and Kentucky in favor of green diesel technologies.

Our action does free up valuable low carbon feedstocks that can be sold to DGD and also helps us focus our energy on making DGD the best low-cost renewable diesel producer in the world,said CEO Randall Stuewe in the earnings call.

Darling did not issue earnings or revenue guidance for the current quarter or year.

However, John Bullock, the companys executive vice president for the North American Specialty Businesses offered a clue about one business line that could grow in coming years.

Jet fuel is an interesting market. We see it as a developing market. It's probably a few years off,Bullock said. There is a lot of conversation about sustainable jet at this point in time. We believe that will be a product in our portfolio as we move forward.

 Next Up: Jet Fuel?

He noted that a jet fuel product was unlikely to be developed for another two to three years.

Because at this point in time, we have more than enough demand on the roadside for any product that we can make. But we do believe the sustainable jet is going to be a key product in the Diamond Green Diesel portfolio at some point in time as we move through the next few years,Bullock said.

Since the earnings report, several analysts either initiated coverage with positive ratings, upgraded the stock or boosted the price target.

Analysts expect earnings of $2.40 per share this year, up 22% over 2020.

For next year, analysts pegged earnings at $4.27 per share, which would mark a 78% year-over-year gain.

The stock is up 18% since its earnings report.

Cleared Cup-With-Handle Base

A glance at the monthly chart reveals a picture of perfection. The stock is working on its twelfth month in a row of gains.

One possible concern for investors looking for an entry point: The stock formed a cup-with-handle base, starting with the broad market pullback last February. It cleared its handle buy point of $26.97 on July 17 in above-average trading volume.

Darlings up/down volume ratio over the past 50 sessions is 1.4, meaning that trading volume to the upside was higher than on the downside.

The stock trended above its 10-week moving average ever since. Its made some slight pullbacks along the way but always regained upside momentum.

The problem with buying overextended stocks, even those with strong prospects, is that institutional investors could take profits, sending the stock lower, even temporarily.

That could mean getting shaken out of the stock, or simply sitting through the frustration of a pullback when you bought the stock at a higher price.

 Darling Ingredients’ Sales, Earnings Soar On Clean Energy Demand

Featured Article: Green Investing

7 Stocks That Still Have Upside For Investors to Buy

It can be fun to invest in some speculative stocks. But it should go without saying that those stocks shouldn’t make up the bulk of your portfolio. In fact, it’s important to find a few good stocks that make up the base of your portfolio. These are momentum stocks that are in a strong uptrend.

One way to find such stocks is to look at the most active stocks (or volume leaders). Shares of these companies are among the most traded or have the highest dollar volume of shares traded in a given trading day.

Any stock may crack this list from time to time (for example, when there’s new news about the company). However, stocks tend to find their way on this list consistently that bear watching. That’s because this list indicates that there is pressure among investors to buy or sell the stock. And that makes an investor’s decision very simple.

And that’s the reason we created this special presentation. The stocks on this list are among the most actively traded stocks on the market today. They also share a similar quality. They are coming off strong years in 2020 and seem to be showing some consolidation for another leg up.

View the "7 Stocks That Still Have Upside For Investors to Buy".

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Darling Ingredients (DAR)1.7$70.74-2.2%N/A23.98Buy$68.90
Compare These Stocks  Add These Stocks to My Watchlist 

MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau

© American Consumer News, LLC dba MarketBeat® 2010-2021. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at [email protected] | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information

© 2021 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer. Fundamental company data provided by Zacks Investment Research. As a bonus to opt-ing into our email newsletters, you will also get a free subscription to the Liberty Through Wealth e-newsletter. You can opt out at any time.