Head to Head Survey: Travel + Leisure (NYSE:TNL) & Darden Restaurants (NYSE:DRI)

Travel + Leisure (NYSE:TNL) and Darden Restaurants (NYSE:DRI) are both consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, earnings, analyst recommendations, institutional ownership, valuation, dividends and profitability.

Risk and Volatility

Travel + Leisure has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500. Comparatively, Darden Restaurants has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.

Dividends

Travel + Leisure pays an annual dividend of $2.40 per share and has a dividend yield of 3.8%. Darden Restaurants pays an annual dividend of $6.48 per share and has a dividend yield of 3.2%. Travel + Leisure pays out 65.6% of its earnings in the form of a dividend. Darden Restaurants pays out 63.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Travel + Leisure has raised its dividend for 5 consecutive years and Darden Restaurants has raised its dividend for 4 consecutive years. Travel + Leisure is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Travel + Leisure and Darden Restaurants”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Travel + Leisure	$4.02 billion	0.96	$230.00 million	$3.66	17.20
Darden Restaurants	$13.21 billion	1.73	$1.21 billion	$10.23	19.60

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

Analyst Ratings

This is a summary of current ratings and price targets for Travel + Leisure and Darden Restaurants, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Travel + Leisure	0	2	11	0	2.85
Darden Restaurants	0	9	18	0	2.67

Travel + Leisure presently has a consensus target price of $89.18, indicating a potential upside of 41.66%. Darden Restaurants has a consensus target price of $232.38, indicating a potential upside of 15.90%. Given Travel + Leisure’s stronger consensus rating and higher probable upside, analysts clearly believe Travel + Leisure is more favorable than Darden Restaurants.

Institutional & Insider Ownership

87.5% of Travel + Leisure shares are held by institutional investors. Comparatively, 93.6% of Darden Restaurants shares are held by institutional investors. 4.0% of Travel + Leisure shares are held by insiders. Comparatively, 0.7% of Darden Restaurants shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Travel + Leisure and Darden Restaurants’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Travel + Leisure	5.81%	-46.91%	6.59%
Darden Restaurants	8.85%	58.64%	9.56%

Summary

Darden Restaurants beats Travel + Leisure on 11 of the 17 factors compared between the two stocks.

About Travel + Leisure

Travel + Leisure Co., together with its subsidiaries, provides hospitality services and travel products in the United States and internationally. The company operates in two segments, Vacation Ownership; and Travel and Membership. The Vacation Ownership segment develops, markets, and sells vacation ownership interests (VOIs) to individual consumers, as well as provides consumer financing in connection with the sale of VOIs; and property management services at resorts. The Travel and Membership segment operates various travel businesses, including three vacation exchange brands, travel technology platforms, travel memberships, and direct-to-consumer rentals. This segment also offers private-label travel booking technology solutions. The company was formerly known as Wyndham Destinations, Inc. and changed its name to Travel + Leisure Co. in February 2021. Travel + Leisure Co. was founded in 1990 and is headquartered in Orlando, Florida.

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.