GreenTree Hospitality Group (NYSE:GHG – Get Free Report) and Darden Restaurants (NYSE:DRI – Get Free Report) are both consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, dividends and analyst recommendations.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for GreenTree Hospitality Group and Darden Restaurants, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| GreenTree Hospitality Group | 1 | 0 | 0 | 0 | 1.00 |
| Darden Restaurants | 0 | 9 | 16 | 0 | 2.64 |
Darden Restaurants has a consensus target price of $232.82, indicating a potential upside of 7.15%. Given Darden Restaurants’ stronger consensus rating and higher possible upside, analysts clearly believe Darden Restaurants is more favorable than GreenTree Hospitality Group.
Institutional & Insider Ownership
8.1% of GreenTree Hospitality Group shares are held by institutional investors. Comparatively, 93.6% of Darden Restaurants shares are held by institutional investors. 88.7% of GreenTree Hospitality Group shares are held by insiders. Comparatively, 0.7% 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 will outperform the market over the long term.
Risk and Volatility
GreenTree Hospitality Group has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500. Comparatively, Darden Restaurants has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500.
Profitability
This table compares GreenTree Hospitality Group and Darden Restaurants’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| GreenTree Hospitality Group | 4.14% | 2.49% | 0.84% |
| Darden Restaurants | 8.85% | 58.64% | 9.56% |
Dividends
GreenTree Hospitality Group pays an annual dividend of $0.05 per share and has a dividend yield of 4.9%. Darden Restaurants pays an annual dividend of $6.48 per share and has a dividend yield of 3.0%. GreenTree Hospitality Group pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Darden Restaurants pays out 63.3% of its earnings in the form of a dividend. Darden Restaurants has increased its dividend for 4 consecutive years.
Valuation & Earnings
This table compares GreenTree Hospitality Group and Darden Restaurants”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| GreenTree Hospitality Group | $156.92 million | 0.66 | $23.85 million | $0.05 | 20.50 |
| Darden Restaurants | $13.21 billion | 1.86 | $1.21 billion | $10.23 | 21.24 |
Darden Restaurants has higher revenue and earnings than GreenTree Hospitality Group. GreenTree Hospitality Group is trading at a lower price-to-earnings ratio than Darden Restaurants, indicating that it is currently the more affordable of the two stocks.
Summary
Darden Restaurants beats GreenTree Hospitality Group on 14 of the 16 factors compared between the two stocks.
About GreenTree Hospitality Group
GreenTree Hospitality Group Ltd., through its subsidiaries, develops leased-and-operated, and franchised-and-managed hotels under the GreenTree Inns brand in the People's Republic of China. It also engages in investment holding activities; and provision of information technology services. The company was founded in 2004 and is headquartered in Shanghai, the People's Republic of China.
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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