In today’s content analysis, we discuss about Brinker International (EAT), a Dallas based company which owns the Chili’s and Maggiano’s restaurants located across 31 different countries. Brinker shows many bullish EVA indicators, and with a 77% SPscore, this company might be eventually added to our US-Large model. 
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Brinker’s intrinsic value curve is growing very steadily since 2012. For the first time in 5 years, the stock traders below its intrinsic value, at a 0.79 P/IV ratio, showing a potential upside of 26%. The intrinsic value growth is explained by the economic performance which hasn’t stop improving over the last 5 years : the return on capital increased every single year, going from 11% in 2011 to 15.7% as of today. In 2011, it took an invested capital of $1.76B to generate a NOPAT of $193M. In 2016, Brinker generated a NOPAT of $269M, an increase of 40% over 2011, with an invested capital of “only” $1.71B !
The future growth value (FGV) of -12.9% is also very attractive. This means the company is trading at a discount versus its current operating value (COV), but the fact that it’s the first time in 5 years that this opportunity presents itself makes the discount even more interesting. The current operating value has also increased steadily, and the COV growth has accelerated since the beginning of 2015. Having the opportunity to buy a growth company at a discount is what we consider an “ideal scenario”.
As for the EVA, its growth is remarkable and very linear. The company has in fact been able to generate more and more wealth for its shareholders very effectively.
Brinker’s accounting performance is also impressive. Revenues, operating profits and earnings per share have increased every single year over the past 5 years. Thanks to its constantly positive free cash flows, the company has been able to increase the dividends at an average growth rate of 19% per year and to buy back 27% of its outstanding shares in just 5 years. Only drawback : the company is highly leveraged with its total liabilities being worth more than its total assets.
