Darden Restaurants, Inc. (DRI), Hasbro, Inc. (HAS), Gannett Co., Inc. (GCI): Three Stocks for Long-Term Income Investors

Page 1 of 2

Darden Restaurants, Inc. (NYSE:DRI)I like to search for great businesses that have high probability of delivering decent long-term results for patient investors. In the past 10 years, these companies have paid uninterrupted dividends for shareholders. They offer investors juicy dividends at more than a 3% yield. Moreover, those businesses are not priced expensively on the market. In this article, I will reveal three stocks that possess similar characteristics in the consumer cyclical sector.

A tasty restaurant

Darden Restaurants, Inc. (NYSE:DRI) is considered one of the world’s biggest full-service restaurant operators, with more than 2,100 restaurants in the U.S. and Canada under several brands including Red Lobster, Olive Garden, LongHorn Steakhouse and Bahama Breeze. In the third quarter 2013, Darden Restaurants, Inc. (NYSE:DRI) experienced a 4.5% increase in revenue to $2.26 billion. However, the earnings came in at $134.4 million, or $1.04 per share, lower than the net income of $164.1 million, or $1.28 per share in the third quarter last year. The lower net income was due to the higher costs of sales, higher depreciation and amortization and a bit higher interest expense.

Looking forward, Darden Restaurants, Inc. (NYSE:DRI) expects to have the sales growth of around 6% to 7% and around 105 net new restaurants additions in this year. Its diluted earnings were estimated to stay around $3.06 to $3.22 per share in full year 2013.

Darden Restaurants, Inc. (NYSE:DRI) stays on top of the list with the juiciest dividend yield. At $52.60 per share, Darden Restaurants, Inc. (NYSE:DRI) is worth nearly $6.9 billion. The market does not value it at a premium, at around 8.83 times EV/EBITDA. Income investors might love Darden because of its high dividend yield at 3.9%. Darden Restaurants, Inc. (NYSE:DRI) was famous to be a consistent dividend-paying company. Since 2003, its dividend has risen from $0.08 per share to $1.72 per share.

EV/EBITDA (Enterprise Value/EBITDA) is quite an efficient ratio which incorporates the cash flow position and the leverage position of the company. It’s formula is Enterprise Value = Market Cap – Cash + Debt, so the company which uses a lot of leverage might have small price/earnings ratio but high EV/EBITDA due to high enterprise value.

Children’s toys could be a win for investors

Hasbro, Inc. (NASDAQ:HAS),  is known for its famous children’s products with several brand names including Transformers, My Little Pony and Baby Alive. It has four main business segments: U.S. and Canada, International, Entertainment and Licensing, and Global Operations. The majority of its revenue, $2.12 billion, was generated from the U.S. and Canada segment. The International segment ranked second with $1.78 billion in sales while the Entertainment and Licensing contributed more than $181.4 million in revenue in 2012.

Recently, Hasbro, Inc. (NASDAQ:HAS) announced a strategic partnership with World Trade Jewelers so that World Trade Jewelers could design jewelry based on Hasbro, Inc. (NASDAQ:HAS)’s popular games. Murray Shabot showed the excitement about the collaboration:

“Hasbro’s branded properties are legendary and proving extremely popular within our jewelry creations. Consumers of all age groups immediately recognize the Candy Land, Scrabble and My Little Pony iconography, and will now be able to wear their favorite designs and themes within our licensed jewelry collections.”

In the past 10 years, Hasbro, Inc. (NASDAQ:HAS) has managed to consistently grow its dividend, from $0.12 per share to $1.74 per share. It is trading at around $44.80 per share, with the total market cap of $5.8 billion. The market values Hasbro at a reasonable valuation, at 8.16 times EV/EBITDA. The company offers its shareholders a nice dividend yield at 3.6%.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

The 10 Most Expensive Cruise Ships in the World

The 10 Fastest Supercomputers in the World

The 10 Best Countries for Doing Business 2015

6 Most Expensive Fruits In The World

10 Worst Airlines in the World

The 10 Biggest Tax Havens in the World to Stash Your Money

The 15 Most Murderous Countries in the World

10 Largest Colleges in the World: Bigger Isn’t Always Better

Comedians in Cars Getting Coffee: The 6 Comedians Seinfeld Needs to Interview

Easy Money: The 10 Most Successful Investors in the World Today

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!