Is Bloomin’ Brands Inc (BLMN) a Bargain?

Though Brinker might look a little more appealing than Bloomin’, Darden Restaurants, Inc. (NYSE:DRI) appears to be the best long-term option of the group. Darden sports a decent profit margin of 4.82%, which isn’t as impressive as Brinker, but offers excellent brand diversification. Darden owns brands Red Lobster, Olive Garden, LongHorn Steakhouse, Bahama Breeze, Seasons 52, Eddie V’s Prime Seafood, and Wild Seafood Grille.

Darden also knows how to make the most of its brands with superb marketing. This leads to consistent traffic and it’s a big reason why revenue has consistently improved over the past three years. Additionally its profits are consistently strong.

Darden also yields an impressive 4.40%. With a debt-to-equity ratio of 1.32, the dividend should be sustainable for quite awhile. Another selling point for Darden is that it’s currently trading at 15 times earnings, making it the best value of the three aforementioned companies.

Conclusion

Due to high debt levels and a high valuation, Bloomin’ doesn’t look to be a great investment at this time. Brinker might be a slightly better option, but it also comes with debt concerns, and it lacks brand diversification.

Thanks to a generous yield, strong marketing, impressive brand diversification, and good valuation, Darden should be the best long-term investment. That said, investors are looking for growth with smaller companies right now, so the highest quality companies aren’t always top performers. Over the long haul, this should change.

The article Is Bloomin’ a Bargain? originally appeared on Fool.com and is written by Dan Moskowitz.

Dan Moskowitz has no position in any stocks mentioned. The Motley Fool owns shares of Darden Restaurants. Dan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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