Financial Review: Darden Restaurants (NYSE:DRI) vs. CAVA Group (NYSE:CAVA)

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

Valuation & Earnings

This table compares Darden Restaurants and CAVA Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Darden Restaurants	$11.39 billion	1.62	$1.03 billion	$8.67	18.08
CAVA Group	$728.70 million	20.96	$13.28 million	$0.37	361.16

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

Analyst Ratings

This is a breakdown of current recommendations for Darden Restaurants and CAVA Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Darden Restaurants	1	6	17	0	2.67
CAVA Group	0	8	8	0	2.50

Darden Restaurants presently has a consensus target price of $179.25, indicating a potential upside of 14.38%. CAVA Group has a consensus target price of $115.64, indicating a potential downside of 13.46%. Given Darden Restaurants’ stronger consensus rating and higher probable upside, analysts clearly believe Darden Restaurants is more favorable than CAVA Group.

Profitability

This table compares Darden Restaurants and CAVA Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Darden Restaurants	9.11%	49.46%	9.39%
CAVA Group	5.04%	7.37%	4.25%

Risk & Volatility

Darden Restaurants has a beta of 1.3, suggesting that its stock price is 30% more volatile than the S&P 500. Comparatively, CAVA Group has a beta of 3.33, suggesting that its stock price is 233% more volatile than the S&P 500.

Insider & Institutional Ownership

93.6% of Darden Restaurants shares are held by institutional investors. Comparatively, 73.2% of CAVA Group shares are held by institutional investors. 0.6% of Darden Restaurants shares are held by insiders. Comparatively, 12.1% of CAVA Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Darden Restaurants beats CAVA Group on 10 of the 14 factors compared between the two stocks.

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.

About CAVA Group

CAVA Group, Inc. owns and operates a chain of restaurants under the CAVA brand in the United States. The company also offers dips, spreads, and dressings through grocery stores. In addition, the company provides online and mobile ordering platforms. Cava Group, Inc. was founded in 2006 and is headquartered in Washington, the District of Columbia.