When it comes to many of the names in the restaurant sector, one of the first things I look for is a company’s ability to demonstrate improved same-restaurant sales growth on a month-over-month basis. With that said, I wanted to take a brief look at the recent sales growth at the Darden Restaurants DRI and also note a number of reasons behind my bullish stance on the company’s stock.

Company Overview

Headquartered in Orlando, Florida, Darden Restaurants, Inc. owns and operates full service restaurants in the United States and Canada. It operates restaurants under the Olive Garden, LongHorn Steakhouse, Bahama Breeze, Seasons 52, The Capital Grille, Eddie V's, and Yard House brand names.

Performance & Trend Behavior

As of Wednesday's close, shares of DRI, which have fallen just over 3% on a year-to-date basis, possess a market cap of $6.75 billion, a forward P/E ratio of 20.58, and a dividend yield of 4.32% ($2.20). Based on their closing price of $50.95/share, shares of DRI are trading 2.62% above their 20-day simple moving average, 6.38% above their 50-day simple moving average, and 5.06% above their 200-day simple moving average.

Based on their recent trends these numbers indicate both a short and a long term uptrend for the stock, which generally translates into a buy mode for most near-term traders and many long-term investors. With that said, I strongly believe we could see its trend behavior continue to reach higher levels on the heels of its very strong September same-restaurant sales growth.

A Brief Look at Darden’s September Sales Growth

On Thursday, October 2, Darden Restaurants released its same-restaurant sales growth for September. Included in that release were strong sales from a majority of the names within its portfolio that included Olive Garden (+0.6%), Longhorn Steakhouse (+3.2%), The Capital Grille (+6.4%), Yard House (+3.8%), Seasons 52 (+1.3%), and Eddie V’s (+4.0%), with the only exception being its Bahama Breeze locations (-0.4%).

As a result of Thursday's announcement, the company also expects its adjusted diluted net earnings per share from continuing operations for the second quarter of fiscal year 2015 to be at the upper end of its previously announced range of $0.26 to $0.28. If these numbers remain strong I think there's a chance we could its adjusted diluted net earnings per share from continuing operations surpass $0.30 per share.

Strong 36-Month Dividend Behavior

Over the last three years we’ve seen Darden Restaurants increase its annualized dividend from $1.28/share in April 2011 to its most recent annualized dividend of $2.20/share that will paid on November 3. This behavior not only demonstrates an overall increase of $0.92/share or $0.3067/share per year but also demonstrates a 3-year dividend growth rate of 71.87%.

Conclusion

If Darden Restaurants can continue to successfully enhance its same-restaurant sales over the next few months, then I strongly believe that not only will its recent trend behavior continue to move in more of an upward direction, but its full year earnings for both 2015 (in which analysts are calling for the company to earn $2.24/share on revenue of $6.68 billion) and 2016 (in which analysts are calling for the company to earn $2.48/share on revenue of $6.87 billion) should have no problem surpassing analysts’ expectations.