Darling Is a Delicious Stock for Your Portfolio

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Darling International LogoDarling International (NYSE:DAR) is a great stock to buy now.  Though its food processing operations may not be as sexy as some tech stocks, Darling is one tasty addition to your portfolio.

Darling has three main divisions: rendering, bakery feeds and restaurant services. In the rendering division, which accounts for 75% of sales, the company collects byproducts from food processing companies and recycles them into components for everything from jet fuel and bio-plastics to pet food and soap. Similarly, the bakery feeds division collects waste from bakery and snack food manufacturers and converts it into “Cookie Meal” a product that replaces standard animal feed. Finally, the restaurant services division aids restaurants in disposing of cooking oil, installing used oil storage systems and cleaning grease traps.

In order to keep on top of its diverse operations, the company has 3,300 employees working across 130 locations in 42 states nationwide. Darling also has a fleet of over 5,000 tractors, trucks and trailers.

As an expert in rendering, the company has been able to diversify into creative recycling practices, branding itself as a “green” company. This is a win-win situation, as consumers and regulators alike are becoming more environmentally conscious.

The waste management industry is highly segmented with more than 70 companies in total. Darling is the eighth-largest in terms of market cap. But the company is second in terms of year-over-year earnings growth (a whopping 359% growth) and third in terms of sales growth (weighing in at 183%). Its P/E ratio of just under 14 is less than half that of the industry average of 32.

In the second quarter, Darling’s sales surged 183.2% to $470.6 million compared with $166.2 million in the same quarter a year ago. During the same period, its earnings rose 214.3% to $52.2 million or $0.44 per share compared with $11.4 million or $0.14 per share. The analyst community was expecting earnings of $0.43 per share and $451.6 million in sales, so Darling posted a 2.3% earnings surprise and a 4.2% sales surprise. Looking forward to the third quarter, the analyst community is expecting 170.2% sales growth and 200% earnings growth! Additionally, the analyst community has revised its consensus earnings estimate 3.8% higher in the past month.

In addition to the fantastic numbers, Darling is partnering up with Valero Energy (NYSE:VLO) to create its own renewable diesel refinery which is a great partnership and makes this a great buy right now.

As of this writing, Louis Navellier was recommending Darling to his Emerging Growth newsletter subscribers.


Article printed from InvestorPlace Media, https://investorplace.com/2011/09/darling-a-delicious-stock-for-your-portfolio-dar-vlo/.

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