Darden Restaurants, Inc. (DRI) vs Pfizer Inc. (PFE): Which Is the Better Buy in 2026?
As of 2026-06-19, DRI is overvalued at $213, with a DCF intrinsic value of $120 and a margin of safety of -77%. PFE is overvalued at $25, with an intrinsic value of $22 and a margin of safety of -12%. Of the two, PFE 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.
- ★Gross margin of 74.8% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★FCF yield of 8.6% is historically attractive — the business generates significant cash relative to its price.
- ★Trailing P/E of 19.2x is 37% below the historical average of 30.4x — potentially undervalued relative to its own history.
Risks
- ⚠Gross margin of 21.5% is low, suggesting a competitive or commodity-like market with limited pricing power.
- ⚠High leverage (3.76x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
- ⚠5 insider sales totaling $2.7M with no purchases in the past 3 months — insiders are reducing their exposure.
- ⚠ROIC has declined by 15.9 percentage points over the past 4 years, which may signal competitive erosion.
- ⚠PEG ratio of 13.77 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.
- ⚠Free cash flow has declined at a 29.6% CAGR over the past 4 years — a concerning trend.
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 $213?
The market implies +13.6% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +13.9%, reflecting heavy growth investment.
What growth rate is the market pricing in at $25?
The market implies +5.2% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +4.5%, reflecting heavy growth investment.
Economic Moat Score
Learn more →Wide moat with strength across all dimensions. Revenue Predictability is the standout factor.
No durable moat detected, though reinvestment efficiency shows some competitive positioning. The business lacks consistent evidence of sustainable advantages.
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 pricing this stock without strong emotion in either direction"
"Market is pricing this stock without strong emotion in either direction"
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 PFE
Is Darden Restaurants, Inc. or Pfizer Inc. more undervalued in 2026?▼
Based on our discounted cash flow model, PFE trades at a -12.3% margin of safety (intrinsic value $22 vs. price $25), compared to DRI's -77.2% margin of safety (intrinsic $120 vs. $213).
Which stock has a wider economic moat, Darden Restaurants, Inc. or Pfizer Inc.?▼
DRI scores 91/100 (Wide moat), while PFE scores 35/100 (None moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is Pfizer Inc. in financial distress?▼
PFE's Altman Z-Score of 2.1 places it in the Grey zone, signaling elevated bankruptcy risk. DRI scores 2.5 (Grey 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 Pfizer Inc.?▼
Pfizer Inc. (PFE) generates a 8.6% free cash flow yield, compared to Darden Restaurants, Inc.'s 4.2%. 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 Pfizer Inc.?▼
DRI earns 12.9% ROIC versus PFE's 10.2%. 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 Pfizer Inc.'s?▼
DRI's dividend earns a safety score of 69/100 (Safe), compared to PFE's 24/100 (Unsafe). DRI has raised its dividend for 3 consecutive years.