CAVA Group (NYSE:CAVA – Get Free Report) and Darden Restaurants (NYSE:DRI – Get Free Report) are both large-cap retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.
Valuation & Earnings
This table compares CAVA Group and Darden Restaurants”s top-line revenue, earnings per share (EPS) and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
CAVA Group | $845.22 million | 18.42 | $13.28 million | $0.41 | 333.00 |
Darden Restaurants | $11.42 billion | 1.70 | $1.03 billion | $8.52 | 19.05 |
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.
Profitability
Net Margins | Return on Equity | Return on Assets | |
CAVA Group | 5.04% | 7.37% | 4.25% |
Darden Restaurants | 9.11% | 49.46% | 9.39% |
Analyst Ratings
This is a summary of current ratings and target prices for CAVA Group and Darden Restaurants, as reported by MarketBeat.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
CAVA Group | 0 | 8 | 8 | 0 | 2.50 |
Darden Restaurants | 1 | 6 | 16 | 0 | 2.65 |
CAVA Group currently has a consensus price target of $116.93, indicating a potential downside of 14.36%. Darden Restaurants has a consensus price target of $180.13, indicating a potential upside of 10.96%. Given Darden Restaurants’ stronger consensus rating and higher possible upside, analysts clearly believe Darden Restaurants is more favorable than CAVA Group.
Institutional & Insider Ownership
73.2% of CAVA Group shares are held by institutional investors. Comparatively, 93.6% of Darden Restaurants shares are held by institutional investors. 12.1% of CAVA Group shares are held by insiders. Comparatively, 0.9% of Darden Restaurants shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Volatility and Risk
CAVA Group has a beta of 3.33, suggesting that its share price is 233% more volatile than the S&P 500. Comparatively, Darden Restaurants has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500.
Summary
Darden Restaurants beats CAVA Group on 10 of the 14 factors compared between the two stocks.
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.
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.
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