Darden Restaurants (NYSE:DRI) versus Biglari (NYSE:BH.A) Financial Analysis

Biglari (NYSE:BH.A) and Darden Restaurants (NYSE:DRI) are both retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Analyst Ratings

This is a summary of current ratings for Biglari and Darden Restaurants, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Biglari	0	0	0	0	0.00
Darden Restaurants	0	11	19	0	2.63

Darden Restaurants has a consensus price target of $224.89, indicating a potential upside of 26.64%. Given Darden Restaurants’ stronger consensus rating and higher probable upside, analysts plainly believe Darden Restaurants is more favorable than Biglari.

Profitability

This table compares Biglari and Darden Restaurants’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Biglari	N/A	N/A	N/A
Darden Restaurants	8.90%	52.35%	9.15%

Risk and Volatility

Biglari has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500. Comparatively, Darden Restaurants has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500.

Earnings & Valuation

This table compares Biglari and Darden Restaurants”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Biglari	$362.11 million	9.63	$333.66 million	$146.34	10.45
Darden Restaurants	$12.36 billion	1.67	$1.05 billion	$9.33	19.03

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

Insider & Institutional Ownership

7.7% of Biglari shares are held by institutional investors. Comparatively, 93.6% of Darden Restaurants shares are held by institutional investors. 70.9% of Biglari shares are held by insiders. Comparatively, 0.5% of Darden Restaurants shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Darden Restaurants beats Biglari on 9 of the 14 factors compared between the two stocks.

About Biglari

Biglari Holdings Inc., through its subsidiaries, primarily operates and franchises restaurants in the United States. The company owns, operates, and franchises restaurants under the Steak n Shake and Western Sizzlin names. As of December 31, 2019, it operated 368 Steak n Shake company-operated restaurants and 213 franchised units; and 4 Western Sizzlin company-operated restaurants and 48 franchised units. The company also engages in underwriting commercial trucking insurance, and selling physical damage and non-trucking liability insurance to truckers; and operates oil and natural gas properties offshore in the Gulf of Mexico. In addition, it publishes and sells magazines, and related publishing products under the MAXIM and Maxim brand name; and licenses media products and services, as well as is involved in the investment activities. The company was formerly known as The Steak n Shake Company and changed its name to Biglari Holdings Inc. in April 2010. Biglari Holdings Inc. was founded in 1934 and is based in San Antonio, Texas.

About Darden Restaurants

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. Darden Restaurants, Inc. was incorporated in 1995 and is based in Orlando, Florida.