Tuesday, October 10, 2017

DRI Activist investors make Darden a Dividend Machine again

You hear a lot about activist investors.   Most recently with P&G and Nelson Peltz.   Darden Group which operates restaurants went through an activist investor intervention and it turned out well.  Let's look at DRI's fundamentals today.

DRI, Dividend Machine Fundamentals support why I am going to add DRI to the 2017 portfolio.

DRI was a Dividend Machine in 2011, 2012 and again in 2013.  Then DRI stalled.  Starboard Capital came in and did re-organization work.  They did a spin off of Four Corners Property Trust, symbol FCPT.   Once that occurred DRI resumed its revenue and dividend growth.   DRI meets all my criteria and I am going to add it today.   See the table below.

One of the weaknesses with DRI is the lack of call option activity.   This may change if revenue growth continues to be robust.  I would like calls but with a yield of 3.18% that is growing at an average rate of 4.85% per year, DRI is good enough for me at this time.

Personally, I bought DRI during the good years and I sold calls which eventually were exercised.  I will be adding DRI to my personal portfolio as well as add it to the 2017 model portfolio.

M* MoneyMadam

Disclosure:  Adding DRI today