NYSE:DAR

Stock Analysis Report

Executive Summary

Darling Ingredients Inc. develops, produces, and sells natural ingredients from edible and inedible bio-nutrients.

Rewards

Earnings are forecast to grow 67.47% per year

Risk Analysis

Interest payments are not well covered by earnings

Highly volatile share price over past 3 months

Profit margins (3.3%) are lower than last year (4.8%)



Snowflake Analysis

Moderate growth potential with mediocre balance sheet.


Similar Companies

Share Price & News

How has Darling Ingredients's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: DAR's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

0.9%

DAR

-1.8%

US Food

-1.5%

US Market


1 Year Return

36.7%

DAR

12.7%

US Food

21.7%

US Market

Return vs Industry: DAR exceeded the US Food industry which returned 13.9% over the past year.

Return vs Market: DAR exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

DARIndustryMarket
7 Day0.9%-1.8%-1.5%
30 Day3.6%-1.8%1.4%
90 Day50.1%4.3%7.9%
1 Year36.7%36.7%15.9%12.7%24.3%21.7%
3 Year141.0%141.0%0.07%-7.9%49.5%39.9%
5 Year68.4%68.4%42.0%25.3%72.6%53.5%

Price Volatility Vs. Market

How volatile is Darling Ingredients's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Darling Ingredients undervalued compared to its fair value and its price relative to the market?

43.16x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: DAR ($29.27) is trading above our estimate of fair value ($5.23)

Significantly Below Fair Value: DAR is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: DAR is poor value based on its PE Ratio (43.6x) compared to the Food industry average (25.4x).

PE vs Market: DAR is poor value based on its PE Ratio (43.6x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: DAR is good value based on its PEG Ratio (0.6x)


Price to Book Ratio

PB vs Industry: DAR is good value based on its PB Ratio (2.1x) compared to the US Food industry average (2.1x).


Next Steps

Future Growth

How is Darling Ingredients forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

52.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DAR's forecast earnings growth (67.5% per year) is above the savings rate (1.7%).

Earnings vs Market: DAR's earnings (67.5% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: DAR's revenue (4.6% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: DAR's revenue (4.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DAR's Return on Equity is forecast to be low in 3 years time (6.1%).


Next Steps

Past Performance

How has Darling Ingredients performed over the past 5 years?

10.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DAR has high quality earnings.

Growing Profit Margin: DAR's current net profit margins (3.3%) are lower than last year (4.8%).


Past Earnings Growth Analysis

Earnings Trend: DAR's earnings have grown by 10.2% per year over the past 5 years.

Accelerating Growth: DAR's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: DAR had negative earnings growth (-33.6%) over the past year, making it difficult to compare to the Food industry average (-12.1%).


Return on Equity

High ROE: DAR's Return on Equity (5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Darling Ingredients's financial position?


Financial Position Analysis

Short Term Liabilities: DAR's short term assets ($853.7M) exceed its short term liabilities ($595.9M).

Long Term Liabilities: DAR's short term assets ($853.7M) do not cover its long term liabilities ($2.0B).


Debt to Equity History and Analysis

Debt Level: DAR's debt to equity ratio (68.3%) is considered high.

Reducing Debt: DAR's debt to equity ratio has reduced from 110.1% to 68.3% over the past 5 years.

Debt Coverage: DAR's debt is well covered by operating cash flow (28.5%).

Interest Coverage: DAR's interest payments on its debt are not well covered by EBIT (1.1x coverage).


Balance Sheet

Inventory Level: DAR has a high level of physical assets or inventory.

Debt Coverage by Assets: DAR's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

What is Darling Ingredients's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage2.7%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate DAR's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate DAR's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if DAR's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if DAR's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of DAR's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Darling Ingredients's salary, the management and board of directors tenure and is there insider trading?

2.7yrs

Average management tenure


CEO

Randall Stuewe (56yo)

16.8yrs

Tenure

US$5,846,278

Compensation

Mr. Randall C. Stuewe, also known as Randy, has been the Chairman and Chief Executive Officer of Darling Ingredients Inc. since February, 3, 2003. Mr. Stuewe served as the President of ConAgra Foods, Inc.  ...


CEO Compensation Analysis

Compensation vs Market: Randall's total compensation ($USD5.85M) is about average for companies of similar size in the US market ($USD4.99M).

Compensation vs Earnings: Randall's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.7yrs

Average Tenure

59yo

Average Age

Experienced Management: DAR's management team is considered experienced (2.7 years average tenure).


Board Age and Tenure

4.0yrs

Average Tenure

68yo

Average Age

Experienced Board: DAR's board of directors are considered experienced (4 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$19,80015 Aug 19
Charles Adair
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max PriceUS$19.80
SellUS$1,449,05711 Mar 19
Randall Stuewe
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares68,940
Max PriceUS$21.02
BuyUS$21,00011 Mar 19
Charles Adair
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max PriceUS$21.00
SellUS$463,34707 Mar 19
Randall Stuewe
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares21,060
Max PriceUS$22.00

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • John Sterling (55yo)

    Executive VP

    • Tenure: 12.4yrs
    • Compensation: US$2.04m
  • John Muse (70yo)

    Executive VP & Chief Administrative Officer

    • Tenure: 2yrs
    • Compensation: US$3.23m
  • Randall Stuewe (56yo)

    Chairman & CEO

    • Tenure: 16.8yrs
    • Compensation: US$5.85m
  • Brad Phillips (60yo)

    Executive VP & CFO

    • Tenure: 2yrs
    • Compensation: US$1.06m
  • Jim Stark (58yo)

    Vice President of Investor Relations

    • Tenure: 0.08yrs
  • Melissa Gaither

    Vice President of Global Communications & Sustainability

    • Jan van der Velden (55yo)

      Executive Vice President of International Rendering & Specialties

      • Tenure: 6yrs
      • Compensation: US$1.69m
    • Rick Elrod (59yo)

      Executive Vice President of Darling U.S. Rendering Operations

      • Tenure: 4.8yrs
      • Compensation: US$1.29m
    • Jos Vervoort (60yo)

      Executive Vice President of Rousselot

      • Tenure: 2.7yrs
      • Compensation: US$1.27m
    • Brenda Snell (62yo)

      Chief Accounting Officer

      • Tenure: 2.1yrs

    Board Members

    • Michael Rescoe (66yo)

      Independent Director

      • Tenure: 2.7yrs
      • Compensation: US$206.50k
    • Cynthia Pharr Lee (70yo)

      Independent Director

      • Tenure: 4yrs
      • Compensation: US$206.00k
    • Charles Macaluso (75yo)

      Lead Director

      • Compensation: US$316.50k
    • Linda Goodspeed (57yo)

      Independent Director

      • Tenure: 2.7yrs
      • Compensation: US$208.00k
    • Mary Korby (74yo)

      Independent Director

      • Tenure: 5.3yrs
      • Compensation: US$227.25k
    • Dirk Kloosterboer (65yo)

      Director

      • Tenure: 6yrs
      • Compensation: US$193.98k
    • Randall Stuewe (56yo)

      Chairman & CEO

      • Tenure: 16.8yrs
      • Compensation: US$5.85m
    • Gary Mize (68yo)

      Independent Director

      • Tenure: 4yrs
      • Compensation: US$210.50k
    • Gene Ewing (70yo)

      Independent Director

      • Tenure: 8.7yrs
      • Compensation: US$233.00k
    • Chuck Adair (68yo)

      Independent Director

      • Tenure: 2.7yrs
      • Compensation: US$211.50k

    Company Information

    Darling Ingredients Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Darling Ingredients Inc.
    • Ticker: DAR
    • Exchange: NYSE
    • Founded: 1882
    • Industry: Agricultural Products
    • Sector: Food, Beverage & Tobacco
    • Market Cap: US$4.743b
    • Shares outstanding: 163.71m
    • Website: https://www.darlingii.com

    Number of Employees


    Location

    • Darling Ingredients Inc.
    • 5601 North MacArthur Boulevard
    • Irving
    • Texas
    • 75038
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    DARNYSE (New York Stock Exchange)YesCommon StockUSUSDSep 1994
    43DDB (Deutsche Boerse AG)YesCommon StockDEEURSep 1994

    Biography

    Darling Ingredients Inc. develops, produces, and sells natural ingredients from edible and inedible bio-nutrients. The company operates through three segments: Feed Ingredients, Food Ingredients, and Fuel Ingredients. It offers a range of ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy, and fertilizer industries. The company collects and transforms various animal by-product streams into useable and specialty ingredients, such as collagen, edible fats, feed-grade fats, animal proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow grease, fuel feedstock, green energy, natural casings, and hides. It also recovers and converts used cooking oil and animal fats, and residual bakery products into valuable feed and fuel ingredients. In addition, the company provides environmental services, including grease trap collection and disposal services to food service establishments. It primarily operates under the Sonac, Dar Pro, Rothsay, Rousselot, CTH, Ecoson, and Rendac brand names in North America, Europe, China, South America, Australia, and internationally. The company was formerly known as Darling International Inc. and changed its name to Darling Ingredients Inc. in May 2014. Darling Ingredients Inc. was founded in 1882 and is headquartered in Irving, Texas. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/29 00:22
    End of Day Share Price2020/01/28 00:00
    Earnings2019/09/28
    Annual Earnings2018/12/29


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.