ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Darden Restaurants's annualized return on capital (ROC %) for the quarter that ended in May. 2026 was 13.57%.
As of today (2026-06-28), Darden Restaurants's WACC % is 6.88%. Darden Restaurants's ROC % is 10.30% (calculated using TTM income statement data).
Darden Restaurants generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Darden Restaurants (XTER:DDN) ROC % Explanation
ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Darden Restaurants's WACC % is 6.88%. Darden Restaurants's ROC % is 10.30% (calculated using TTM income statement data).
Darden Restaurants generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Darden Restaurants ROC % Related Terms
Darden Restaurants ROC % Historical Data
* Premium members only.
The historical data trend for Darden Restaurants's ROC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Note:
The Operating Income data used here is four times the quarterly (May. 2026) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Darden Restaurants (XTER:DDN) has a ROC % of 13.57% as of May. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Darden Restaurants and its competitors.
Is Darden Restaurants' ROC % too high?
Darden Restaurants' current ROC % is 13.57%. The Restaurants industry median ROC % is 4.24. Darden Restaurants' value of 13.57% is 220% above this industry median. Overall, Darden Restaurants has a GF Score™ of 87/100, reflecting its overall financial health beyond just this single metric.
How does Darden Restaurants' ROC % compare to YUMC and TXRH?
Darden Restaurants' ROC % of 13.57% can be compared against companies in the Restaurants industry. The industry median ROC % is 4.24. Darden Restaurants' value of 13.57% is 220% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for a Restaurants company?
The median ROC % among Restaurants companies is 4.24, based on 358 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Darden Restaurants's current ROC % of 13.57% is 220% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Darden Restaurants and its competitors. For the Restaurants industry, the median ROC % is 4.24 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Darden Restaurants's current ROC % is 13.57%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Darden Restaurants stock overvalued right now?
Darden Restaurants (XTER:DDN) has a current ROC % of 13.57%. The stock's GF Value™ is €177.74, compared to a current price of €180.60 — trading 1.6% above its estimated fair value. The current ROC % is 13.57% and 220% above the Restaurants industry median of 4.24. Darden Restaurants' overall GF Score™ is 87/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For Darden Restaurants (XTER:DDN), the current ROC % is 13.57% as of May. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Darden Restaurants (XTER:DDN) Overvalued in 2026?
Based on GuruFocus' analysis, Darden Restaurants stock appears to be overvalued.
The current stock price of €180.60 is trading 1.6% above its estimated GF Value™ of €177.74.
Key valuation signals for XTER:DDN:
ROC %: 13.57%
GF Value™: €177.74 vs. price of €180.60 (1.6% above fair value)
Industry Position: 220% above the Restaurants median
No single metric tells the full story. See the XTER:DDN stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Darden Restaurants is the largest global full-service dining operator, with over $12 billion in system sales across 2,159 company-owned stores at the end of fiscal 2025, spanning the US and Canada. The firm operates 10 banners in four segments, including Olive Garden (43% of sales), LongHorn Steakhouse (25%), and fine dining (21%), which includes The Capital Grille, Ruth's Chris, and Eddie V's. The other 11% of sales comes from smaller concepts such as Yard House and Cheddar's. Darden primarily generates revenue through sales of food and beverage items at its company-owned restaurants. It also earns royalties on sales from 154 franchised locations in US and international markets, which sit within the other segment but are immaterial to consolidated results.
87GF Score
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