Description
Created
Mar 26, 2025 6:39 PM
URL
Circular Economy Involvement
Upcycles animal by-products and used cooking oil into feed, collagen, fertilizers, renewable biofuels; Diamond Green Diesel JV.
Company Name
Darling Ingredients
Cover Image
Industry/Subsector
Renewable Materials & Energy – Rendering, Biofuels
Investment Thesis
Converts waste into high-demand products; strong potential in renewable diesel/SAF; proven acquisitions strategy; historically solid ROE.
Market CapitalizationMarket Capitalization
Multi-selectMarket Capitalization
~$4.7 billion
Recent Financial Performance
~$6.8B revenue, ~$648M net income (peak), margins ~5–10% depending on commodity pricing, debt/equity ~0.95
Stock
Ticker
DAR
- Industry/Subsector: Renewable Materials & Energy – Rendering, Biofuels, Sustainable Feed
- Market Capitalization: ~$4.7 billion
- Circular Economy Involvement: Darling Ingredients is a leader in upcycling waste from the food and agriculture industries. The company collects animal by-products (fat, bone, protein scraps), used cooking oil, and other organic residuals that would otherwise be waste, and processes them into valuable products – such as animal feed ingredients, collagen/gelatin, fertilizers, and renewable biofuels. Through its joint venture Diamond Green Diesel, Darling converts waste fats and oils into renewable diesel and sustainable aviation fuel. In essence, Darling’s business model closes the loop on organic waste, turning it into new resources. The company proudly notes, “We are a leader in circularity — showcasing that sustainability and profitability can go hand-in-hand.”, reflecting its core mission of creating value from refuse.
- Recent Financial Performance: After strong growth in 2021–2022, Darling saw a pullback in 2023–2024 due to lower pricing for some end products. In 2023 it had $6.8 billion in revenue with $648 million net income (net margin ~9.5%). 2024 was more challenging: revenues declined to ~$5.7 billion and net income fell to $279 million (impacted by lower fuel/feed prices and higher costs). This brought net margin down to ~5% and ROE to the mid-single digits. However, the downturn appears cyclical. Historically, ROE has been around 15–20% during normal conditions. The balance sheet is sound with debt/equity ~0.95, and the company remained profitable even in the trough.
- Investment Thesis: Darling Ingredients uniquely sits at the intersection of sustainability and specialty chemicals/energy. It provides an essential service (disposing of food industry waste) and turns it into high-demand products like renewable diesel (a growing market as low-carbon fuels are mandated) and feed proteins. The long-term thesis is that as the world pushes for lower waste and lower carbon fuels, Darling’s feedstock (used fats, greases) will be increasingly valuable. Management has proven adept at strategic acquisitions to expand its global supply of waste streams. Despite recent earnings volatility, Darling has shown it can deliver solid returns over time and even grow through commodity cycles. Investors with a long view can find value in its renewable energy upside (e.g. new sustainable aviation fuel production started in 2024) and its irreplaceable role in the circular bioeconomy. As the company puts it, Darling’s business model truly exemplifies that “trash” can be turned into cash, aligning profit with planet.