7 Best Restaurant Dividend Stocks to Buy

4. Darden Restaurants, Inc. (NYSE:DRI)

Number of Hedge Fund Holders: 32

Darden Restaurants, Inc. (NYSE:DRI) is an American multi-brand restaurant company that has operations in over 1800 locations. The company has attracted attention due to the struggles of its largest brand, Olive Garden. According to analysts, recent quarters have seen a decrease in the share price of DRI, with Olive Garden contributing only modestly in the fourth fiscal quarter of 2024. DRI is down by over 11% since the start of 2024. Same-restaurant sales for Olive Garden fell by 1.5% in the most recent quarter. The primary factor behind this decline is Olive Garden’s decision to avoid the deep discounts that its competitors were using. This strategy allowed rival chains to draw customers away from fast-food outlets. However, Olive Garden’s focus on maintaining generally low prices instead of providing large discounts is seen as a more sustainable approach in the long term. This is evident from Olive Garden’s same-store guest counts in the fourth quarter, which were approximately 0.6% above the industry average.

In fiscal Q4 2024, Darden Restaurants, Inc. (NYSE:DRI) reported revenue of $3 billion, which showed a 6.8% growth from the same period last year. This growth was attributed to the addition of 80 company-owned Ruth’s Chris Steak House locations and 37 other new restaurants. The company aims to continue expanding its network, with plans to open 45 to 50 new restaurants in FY25.

Darden Restaurants, Inc. (NYSE:DRI), one of the best dividend stocks in the restaurant industry, announced a 7% hike in its quarterly dividend on June 20 at $1.40 per share. The company has raised its dividends multiple times since it reinstated its payouts in September 2020. In FY24, it generated over $1.6 billion in operating cash flow, up from $1.5 billion in the previous year. The stock has a dividend yield of 3.89%, as of August 6.

At the end of March 2024, 32 hedge funds, up from 31 in the previous quarter, owned stakes in Darden Restaurants, Inc. (NYSE:DRI), according to Insider Monkey’s database. The overall value of these stakes is more than $345.2 million. Among these hedge funds, Steadfast Capital Management was the company’s leading stakeholder in Q1.