ARCOS DORADOS HOLDINGS INC-A (ARCO) Stock Fundamental Analysis
USA - NYSE:ARCO - VGG0457F1071 - Common Stock
6.8 USD
+0.01 (+0.15%)
6.8 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to ARCO. ARCO was compared to 133 industry peers in the Hotels, Restaurants & Leisure industry. There are concerns on the financial health of ARCO while its profitability can be described as average. ARCO has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
ARCO had positive earnings in the past year.
In the past year ARCO had a positive cash flow from operations.
ARCO had positive earnings in 4 of the past 5 years.
ARCO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a Return On Assets value of 3.86%, ARCO perfoms like the industry average, outperforming 57.89% of the companies in the same industry.
ARCO's Return On Equity of 22.43% is fine compared to the rest of the industry. ARCO outperforms 79.70% of its industry peers.
The Return On Invested Capital of ARCO (6.82%) is comparable to the rest of the industry.
ARCO had an Average Return On Invested Capital over the past 3 years of 8.93%. This is significantly below the industry average of 15.68%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.86% | ||
| ROE | 22.43% | ||
| ROIC | 6.82% |
ROA(3y)5.49%
ROA(5y)2.38%
ROE(3y)35.94%
ROE(5y)10.55%
ROIC(3y)8.93%
ROIC(5y)N/A
1.3 Margins
ARCO has a Profit Margin (2.89%) which is in line with its industry peers.
ARCO's Profit Margin has improved in the last couple of years.
ARCO has a Operating Margin (6.46%) which is in line with its industry peers.
In the last couple of years the Operating Margin of ARCO has grown nicely.
ARCO's Gross Margin of 12.53% is on the low side compared to the rest of the industry. ARCO is outperformed by 90.98% of its industry peers.
ARCO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.46% | ||
| PM (TTM) | 2.89% | ||
| GM | 12.53% |
OM growth 3Y13.39%
OM growth 5Y5.96%
PM growth 3Y24.84%
PM growth 5Y4.27%
GM growth 3Y1.69%
GM growth 5Y14.64%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ARCO is still creating some value.
ARCO has about the same amout of shares outstanding than it did 1 year ago.
ARCO has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, ARCO has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.14 indicates that ARCO is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.14, ARCO perfoms like the industry average, outperforming 55.64% of the companies in the same industry.
A Debt/Equity ratio of 1.68 is on the high side and indicates that ARCO has dependencies on debt financing.
With a Debt to Equity ratio value of 1.68, ARCO perfoms like the industry average, outperforming 54.14% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.14 |
ROIC/WACC0.82
WACC8.3%
2.3 Liquidity
A Current Ratio of 0.80 indicates that ARCO may have some problems paying its short term obligations.
ARCO has a Current ratio of 0.80. This is comparable to the rest of the industry: ARCO outperforms 42.86% of its industry peers.
A Quick Ratio of 0.73 indicates that ARCO may have some problems paying its short term obligations.
ARCO has a Quick ratio of 0.73. This is comparable to the rest of the industry: ARCO outperforms 42.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.73 |
3. Growth
3.1 Past
The earnings per share for ARCO have decreased strongly by -23.46% in the last year.
The Earnings Per Share has been growing by 11.38% on average over the past years. This is quite good.
The Revenue has been growing slightly by 0.09% in the past year.
The Revenue has been growing by 8.60% on average over the past years. This is quite good.
EPS 1Y (TTM)-23.46%
EPS 3Y45.99%
EPS 5Y11.38%
EPS Q2Q%-23.08%
Revenue 1Y (TTM)0.09%
Revenue growth 3Y18.89%
Revenue growth 5Y8.6%
Sales Q2Q%2.83%
3.2 Future
Based on estimates for the next years, ARCO will show a small growth in Earnings Per Share. The EPS will grow by 6.78% on average per year.
The Revenue is expected to grow by 6.48% on average over the next years.
EPS Next Y-13.58%
EPS Next 2Y2.65%
EPS Next 3Y9.23%
EPS Next 5Y6.78%
Revenue Next Year4.12%
Revenue Next 2Y5.92%
Revenue Next 3Y6.87%
Revenue Next 5Y6.48%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 10.97, which indicates a very decent valuation of ARCO.
Compared to the rest of the industry, the Price/Earnings ratio of ARCO indicates a rather cheap valuation: ARCO is cheaper than 90.98% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.27. ARCO is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 8.96 indicates a reasonable valuation of ARCO.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ARCO indicates a rather cheap valuation: ARCO is cheaper than 92.48% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.77, ARCO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.97 | ||
| Fwd PE | 8.96 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ARCO indicates a rather cheap valuation: ARCO is cheaper than 94.74% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 4.35 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)0.96
EPS Next 2Y2.65%
EPS Next 3Y9.23%
5. Dividend
5.1 Amount
ARCO has a Yearly Dividend Yield of 3.40%. Purely for dividend investing, there may be better candidates out there.
ARCO's Dividend Yield is rather good when compared to the industry average which is at 3.93. ARCO pays more dividend than 85.71% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, ARCO pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.4% |
5.2 History
On average, the dividend of ARCO grows each year by 17.60%, which is quite nice.
ARCO has been paying a dividend for at least 10 years, so it has a reliable track record.
ARCO has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)17.6%
Div Incr Years2
Div Non Decr Years3
5.3 Sustainability
38.85% of the earnings are spent on dividend by ARCO. This is a low number and sustainable payout ratio.
ARCO's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP38.85%
EPS Next 2Y2.65%
EPS Next 3Y9.23%
6.8
+0.01 (+0.15%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners51.42%
Inst Owner Change0.39%
Ins Owners4.55%
Ins Owner ChangeN/A
Market Cap1.43B
Analysts81.43
Price Target10.04 (47.65%)
Short Float %1.72%
Short Ratio2.33
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.4% |
Yearly Dividend0.24
Dividend Growth(5Y)17.6%
DP38.85%
Div Incr Years2
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-6.23%
Min EPS beat(2)-40.32%
Max EPS beat(2)27.87%
EPS beat(4)3
Avg EPS beat(4)5.1%
Min EPS beat(4)-40.32%
Max EPS beat(4)28.68%
EPS beat(8)4
Avg EPS beat(8)0.54%
EPS beat(12)7
Avg EPS beat(12)13.28%
EPS beat(16)10
Avg EPS beat(16)21.58%
Revenue beat(2)1
Avg Revenue beat(2)-0.69%
Min Revenue beat(2)-1.53%
Max Revenue beat(2)0.15%
Revenue beat(4)1
Avg Revenue beat(4)-1.22%
Min Revenue beat(4)-2.79%
Max Revenue beat(4)0.15%
Revenue beat(8)5
Avg Revenue beat(8)0.36%
Revenue beat(12)7
Avg Revenue beat(12)0.18%
Revenue beat(16)11
Avg Revenue beat(16)1.36%
PT rev (1m)-3.37%
PT rev (3m)-6%
EPS NQ rev (1m)0%
EPS NQ rev (3m)3.13%
EPS NY rev (1m)-1.81%
EPS NY rev (3m)-11.43%
Revenue NQ rev (1m)2.04%
Revenue NQ rev (3m)0.48%
Revenue NY rev (1m)-0.06%
Revenue NY rev (3m)-0.36%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.97 | ||
| Fwd PE | 8.96 | ||
| P/S | 0.32 | ||
| P/FCF | N/A | ||
| P/OCF | 5.49 | ||
| P/B | 2.47 | ||
| P/tB | 3.28 | ||
| EV/EBITDA | 4.35 |
EPS(TTM)0.62
EY9.12%
EPS(NY)0.76
Fwd EY11.16%
FCF(TTM)-0.1
FCFYN/A
OCF(TTM)1.24
OCFY18.21%
SpS21.35
BVpS2.75
TBVpS2.07
PEG (NY)N/A
PEG (5Y)0.96
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.86% | ||
| ROE | 22.43% | ||
| ROCE | 11.19% | ||
| ROIC | 6.82% | ||
| ROICexc | 7.49% | ||
| ROICexgc | 7.97% | ||
| OM | 6.46% | ||
| PM (TTM) | 2.89% | ||
| GM | 12.53% | ||
| FCFM | N/A |
ROA(3y)5.49%
ROA(5y)2.38%
ROE(3y)35.94%
ROE(5y)10.55%
ROIC(3y)8.93%
ROIC(5y)N/A
ROICexc(3y)10.07%
ROICexc(5y)N/A
ROICexgc(3y)10.43%
ROICexgc(5y)N/A
ROCE(3y)14.7%
ROCE(5y)N/A
ROICexcg growth 3Y20.8%
ROICexcg growth 5Y13.02%
ROICexc growth 3Y20.55%
ROICexc growth 5Y12.8%
OM growth 3Y13.39%
OM growth 5Y5.96%
PM growth 3Y24.84%
PM growth 5Y4.27%
GM growth 3Y1.69%
GM growth 5Y14.64%
F-Score4
Asset Turnover1.33
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 2.05 | ||
| Cap/Depr | 154.34% | ||
| Cap/Sales | 6.29% | ||
| Interest Coverage | 5.71 | ||
| Cash Conversion | 55.07% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.73 | ||
| Altman-Z | 2.14 |
F-Score4
WACC8.3%
ROIC/WACC0.82
Cap/Depr(3y)202.4%
Cap/Depr(5y)154.14%
Cap/Sales(3y)7.21%
Cap/Sales(5y)6.06%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-23.46%
EPS 3Y45.99%
EPS 5Y11.38%
EPS Q2Q%-23.08%
EPS Next Y-13.58%
EPS Next 2Y2.65%
EPS Next 3Y9.23%
EPS Next 5Y6.78%
Revenue 1Y (TTM)0.09%
Revenue growth 3Y18.89%
Revenue growth 5Y8.6%
Sales Q2Q%2.83%
Revenue Next Year4.12%
Revenue Next 2Y5.92%
Revenue Next 3Y6.87%
Revenue Next 5Y6.48%
EBIT growth 1Y-7.72%
EBIT growth 3Y34.81%
EBIT growth 5Y15.08%
EBIT Next Year63.63%
EBIT Next 3Y27.47%
EBIT Next 5Y21.99%
FCF growth 1Y-160.15%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-15.25%
OCF growth 3Y1.13%
OCF growth 5Y3.61%