Darden Restaurants, Inc. (DRI) vs Mastercard Incorporated (MA): Which Is the Better Buy in 2026?
As of 2026-11-01, DRI is overvalued at $220, with a DCF intrinsic value of $188 and a margin of safety of -17%. MA is overvalued at $638, with an intrinsic value of $563 and a margin of safety of -13%. Of the two, MA has the wider margin of safety.
Rewards
- ★Darden Restaurants, Inc. has maintained ROIC above 10% for 4 consecutive years, suggesting solid business economics.
- ★Darden Restaurants, Inc. scores 91/100 on the Economic Moat Score (Wide Moat), with revenue predictability as the strongest competitive dimension.
- ★Return on equity has consistently exceeded 20% over 4 years, indicating efficient use of shareholder capital.
- ★Mastercard Incorporated has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
- ★Gross margin of 100.0% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Mastercard Incorporated scores 99/100 on the Economic Moat Score (Wide Moat), with roic consistency as the strongest competitive dimension.
Risks
- ⚠Gross margin of 21.7% is low, suggesting a competitive or commodity-like market with limited pricing power.
- ⚠PEG ratio of 2.25 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.
- ⚠High leverage (4.05x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
- ⚠FCF yield of 3.0% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
- ⚠High leverage (2.00x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
- ⚠9 insider sales totaling $24.1M with no purchases in the past 3 months — insiders are reducing their exposure.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →What growth rate is the market pricing in at $220?
The market implies +12.1% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +13.5%, reflecting heavy growth investment.
What growth rate is the market pricing in at $638?
The market implies +16.4% Owner Earnings growth, roughly in line with history — reasonably priced.
Standard FCF implies +15.0%, reflecting ongoing growth investment.
Economic Moat Score
Learn more →Wide moat with strength across all dimensions. Revenue Predictability is the standout factor.
Wide moat with strength across all dimensions. ROIC Consistency is the standout factor.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is optimistic — be cautious and ensure you have a margin of safety"
"Market is optimistic — be cautious and ensure you have a margin of safety"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: DRI vs MA
Is Darden Restaurants, Inc. or Mastercard Incorporated more undervalued in 2026?▼
Based on our discounted cash flow model, MA trades at a -13.3% margin of safety (intrinsic value $563 vs. price $638), compared to DRI's -17.3% margin of safety (intrinsic $188 vs. $220).
Which stock has a wider economic moat, Darden Restaurants, Inc. or Mastercard Incorporated?▼
MA scores 99/100 (Wide moat), while DRI scores 91/100 (Wide moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is Darden Restaurants, Inc. in financial distress?▼
DRI's Altman Z-Score of 2.6 places it in the Grey zone, signaling elevated bankruptcy risk. MA scores 10.6 (Safe zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.
Which company has better free cash flow, Darden Restaurants, Inc. or Mastercard Incorporated?▼
Darden Restaurants, Inc. (DRI) generates a 4.4% free cash flow yield, compared to Mastercard Incorporated's 3.0%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.
Which stock has higher return on invested capital, Darden Restaurants, Inc. or Mastercard Incorporated?▼
MA earns 56.6% ROIC versus DRI's 9.8%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.
Which dividend is safer, Darden Restaurants, Inc.'s or Mastercard Incorporated's?▼
MA's dividend earns a safety score of 94/100 (Very Safe), compared to DRI's 69/100 (Safe). MA has raised its dividend for 3 consecutive years.