Analyzing J d Wetherspoon (OTCMKTS:JDWPY) & Darden Restaurants (NYSE:DRI)

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

Risk & Volatility

J d Wetherspoon has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, Darden Restaurants has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500.

Institutional and Insider Ownership

93.6% of Darden Restaurants shares are owned by institutional investors. 0.5% of Darden Restaurants shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares J d Wetherspoon and Darden Restaurants’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
J d Wetherspoon	N/A	N/A	N/A
Darden Restaurants	8.92%	52.44%	9.10%

Dividends

J d Wetherspoon pays an annual dividend of $1.01 per share and has a dividend yield of 2.4%. Darden Restaurants pays an annual dividend of $6.00 per share and has a dividend yield of 2.8%. Darden Restaurants pays out 62.9% of its earnings in the form of a dividend. Darden Restaurants has raised its dividend for 4 consecutive years. Darden Restaurants is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current recommendations for J d Wetherspoon and Darden Restaurants, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
J d Wetherspoon	0	0	0	0	0.00
Darden Restaurants	0	9	20	0	2.69

Darden Restaurants has a consensus target price of $224.78, indicating a potential upside of 5.89%. Given Darden Restaurants’ stronger consensus rating and higher possible upside, analysts clearly believe Darden Restaurants is more favorable than J d Wetherspoon.

Valuation and Earnings

This table compares J d Wetherspoon 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
J d Wetherspoon	$2.76 billion	0.34	$88.36 million	N/A	N/A
Darden Restaurants	$12.08 billion	2.02	$1.05 billion	$9.54	22.25

Darden Restaurants has higher revenue and earnings than J d Wetherspoon.

Summary

Darden Restaurants beats J d Wetherspoon on 13 of the 15 factors compared between the two stocks.

About J d Wetherspoon

J D Wetherspoon plc owns and operates pubs and hotels in the United Kingdom and the Republic of Ireland. The company was founded in 1979 and is based in Watford, the United Kingdom.

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.