Portfolio No 4.
Darden Restaurants (DRI) is a quintessential all American stock. It plays directly into our insulated and affluent consumer market.
The Group includes Olive Garden, Long Horn Steakhouse and many other brands totalling over 1700 restaurants. It has beaten its targets for the last 3 quarters, has a P/E of 21, an undelying annual growth rate of 20% and a return on equity of 31%.
DRI is rated highly by Fidelity (9), a “Buy” by Zachs and a strong hold by the slate of Yahoo analysts.
Operating margins are 10% and rising as are the expectations for the next quarter. The Dividend yield was 2.7% when I bought a few months ago (2.5% today). The forecasts for 2019 and 2020 are strong.
The overall portfolio is currently showing a 37% return after nearly 4 months.
A word in this context about the market. If you read my Thought for Monday geoeconmic column it will not surprise you that DRI, NRZ and NXST are such confident investments of mine. For the life of me I cannot understand anyone flirting with the additional risks associated with a collasping Europe, the steadfast flatness of Japan, or the inevitable local dangers of “Emerging Markets”, when we have such formidable, expert and proven options here at home. Indeed if my geoeconomic outlook is correct then not only is the US the one safe haven for investors but we can expect our US market to reach a series of record highs over the next 6 -18 months.
Be fully invested.
All the best, James.
James is an advisor to te King Group Wealth Management Team of Merrill Lynch.