Is Darden Restaurants (DRI) Outperforming Other Retail-Wholesale Stocks This Year?

Zacks
04 Mar

The Retail-Wholesale group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Darden Restaurants (DRI) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? A quick glance at the company's year-to-date performance in comparison to the rest of the Retail-Wholesale sector should help us answer this question.

Darden Restaurants is one of 214 individual stocks in the Retail-Wholesale sector. Collectively, these companies sit at #6 in the Zacks Sector Rank. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks Rank of the individual stocks within the groups.

The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Darden Restaurants is currently sporting a Zacks Rank of #2 (Buy).

Over the past 90 days, the Zacks Consensus Estimate for DRI's full-year earnings has moved 0.5% higher. This signals that analyst sentiment is improving and the stock's earnings outlook is more positive.

Based on the most recent data, DRI has returned 4.9% so far this year. At the same time, Retail-Wholesale stocks have gained an average of 2.4%. As we can see, Darden Restaurants is performing better than its sector in the calendar year.

Hagerty, Inc. (HGTY) is another Retail-Wholesale stock that has outperformed the sector so far this year. Since the beginning of the year, the stock has returned 3.7%.

The consensus estimate for Hagerty, Inc.'s current year EPS has increased 4.9% over the past three months. The stock currently has a Zacks Rank #2 (Buy).

Breaking things down more, Darden Restaurants is a member of the Retail - Restaurants industry, which includes 39 individual companies and currently sits at #71 in the Zacks Industry Rank. On average, stocks in this group have gained 6.1% this year, meaning that DRI is slightly underperforming its industry in terms of year-to-date returns.

In contrast, Hagerty, Inc. falls under the Automotive - Retail and Wholesale - Parts industry. Currently, this industry has 8 stocks and is ranked #60. Since the beginning of the year, the industry has moved +9.8%.

Investors interested in the Retail-Wholesale sector may want to keep a close eye on Darden Restaurants and Hagerty, Inc. as they attempt to continue their solid performance.

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This article originally published on Zacks Investment Research (zacks.com).

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