Entering text into the input field will update the search result below

Darling Ingredients: A Darling Inflation And ESG Hedge


  • Animal feed business advantaged against high grain prices.
  • Food business advantaged against other competing products.
  • Renewable diesel is a crown jewel that shines in a high energy environment and is poised for huge volume growth.
  • Entire business is an ESG darling.

Yellow oil bubbles

filipfoto/iStock via Getty Images

The Business:

Darling Ingredients (NYSE:DAR) is one of those companies that has been around for over 100 years that most people, yet with which most people remain completely unfamiliar. They operate very much in the background, collecting

This article was written by

CashFlow Hunter profile picture

Cashfow Hunter has over 25 years of experience in the markets, with nearly 20 of them as a hedge fund portfolio manager. His experience investing in debt and equity markets gives him unique insights into markets. He successfully predicted the implosion of Silicon Valley Bank. He has degrees from Wharton and MIT.

He leads the investing group Catalyst Hedge Investing, in which he shares his best long and short ideas. He looks for investment ideas with asymmetric risk/reward and a clear catalyst. Learn More.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of DAR either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (12)

Charles Goldblum, CFA profile picture
I'm new to this story. Thanks for the article. Why should DGD be worth 12x EBITDA? Shouldn't margins be somewhat volatile in fuel? Also, does DAR have sufficient feedstock to feed all the expansions?
CashFlow Hunter profile picture
@Charles Goldblum, CFA way more growth and better margins than most other RD/biodiesel co’s and yes, they have the feedstock. No one else does.
Great post on this under the radar enterprise. Long based on business model and expect some boost once ESG crowd puts some money where their mouths are.
Jonathan Cook President EZ Ledgers, Inc profile picture
Late August EZL purchased DAR when it appeared on Yahoo's Loser List - the stock trades between a P/E of 15 and 18 and earnings are projected to be $5.76 per share - EZL will add shares below $86.40 and hold for $104.00. Which is higher than the analyst mean price of $96.00
What is the wholesale ASP for renewable diesel compared to oil based diesel?
CashFlow Hunter profile picture
@art5 can't tell you whole versus retail but DGD realized about $6.75/gallon in both Q1 and Q2...the bulk of that rins, lcfs and blenders credits.
Will DAR ever become a dividend paying company
CashFlow Hunter profile picture
@cseago5 not sure. Cash flow will be prodigious though and the balance sheet is in good shape. They will likely be pressured to at some point.
rmlucysboy profile picture
..held it long... and will hold it LONG....
argonbeam profile picture
Thanks for the article. I think most people are not aware of the amount of renewable diesel projects planned and coming online. All of these will need feedstock. The $ amount for a gallon of fuel using LCFS pathways is determined by the fuel's carbon intensity (CI) score. The feedstock used in production is the most important factor in determining CI of the resultant fuel. Those producers with access to the best feedstock are therefore most advantaged in terms of LCFS credits. $REGI actually has pretty good feedstock sources too.

One thing to keep an eye on is sustainable aviation fuel (SAF). This is the new hot item and airlines are tripping over themselves to push into this field. Biden has even mentioned it, so it has the attention of the Feds as well. Any major expansion into SAF will likely poach from RD due to feedstock competition. This could still be good for $DAR, as refiners can modify to produce more SAF than RD if need be.
CashFlow Hunter profile picture
@argonbeam I agree and thanks for mentioning the SAF. It's going to be a tailwind for sure.
Excellent in debt article. I will stay invested with DAR!
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

About DAR

SymbolLast Price% Chg
Market Cap
Yield (TTM)
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on DAR

Related Stocks

SymbolLast Price% Chg
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.