ARCOS DORADOS HOLDINGS INC-A (ARCO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ARCO - VGG0457F1071 - Common Stock
7.59 USD
+0.28 (+3.83%)
7.6 USD
+0.01 (+0.13%)
ARCO gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 132 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 correct valuation and a medium growth rate.
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.
Of the past 5 years ARCO 4 years were profitable.
In the past 5 years ARCO always reported a positive cash flow from operatings.
1.2 Ratios
ARCO has a Return On Assets (3.86%) which is in line with its industry peers.
ARCO's Return On Equity of 22.43% is fine compared to the rest of the industry. ARCO outperforms 79.55% of its industry peers.
Looking at the Return On Invested Capital, with a value of 6.82%, ARCO is in line with its industry, outperforming 58.33% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ARCO is in line with the industry average of 10.42%.
| 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 of 2.89%. This is comparable to the rest of the industry: ARCO outperforms 50.00% of its industry peers.
ARCO's Profit Margin has improved in the last couple of years.
ARCO has a Operating Margin (6.46%) which is comparable to the rest of the industry.
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 89.39% of its industry peers.
In the last couple of years the Gross Margin of ARCO has grown nicely.
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), ARCO is creating some value.
ARCO has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for ARCO has been increased compared to 5 years ago.
The debt/assets ratio for ARCO is higher compared to a year ago.
2.2 Solvency
ARCO has an Altman-Z score of 2.18. This is not the best score and indicates that ARCO is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of ARCO (2.18) is better than 60.61% of its industry peers.
ARCO has a Debt/Equity ratio of 1.68. This is a high value indicating a heavy dependency on external financing.
ARCO's Debt to Equity ratio of 1.68 is in line compared to the rest of the industry. ARCO outperforms 55.30% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.18 |
ROIC/WACC0.9
WACC7.6%
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 (0.80) which is in line with its industry peers.
A Quick Ratio of 0.73 indicates that ARCO may have some problems paying its short term obligations.
The Quick ratio of ARCO (0.73) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.73 |
3. Growth
3.1 Past
ARCO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -18.57%.
The Earnings Per Share has been growing by 11.38% on average over the past years. This is quite good.
ARCO shows a small growth in Revenue. In the last year, the Revenue has grown by 3.19%.
ARCO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.60% yearly.
EPS 1Y (TTM)-18.57%
EPS 3Y45.99%
EPS 5Y11.38%
EPS Q2Q%-29.41%
Revenue 1Y (TTM)3.19%
Revenue growth 3Y18.89%
Revenue growth 5Y8.6%
Sales Q2Q%5.22%
3.2 Future
Based on estimates for the next years, ARCO will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.48% on average per year.
Based on estimates for the next years, ARCO will show a small growth in Revenue. The Revenue will grow by 6.20% on average per year.
EPS Next Y-15.41%
EPS Next 2Y0.39%
EPS Next 3Y8.11%
EPS Next 5Y9.48%
Revenue Next Year4.41%
Revenue Next 2Y6.01%
Revenue Next 3Y6.68%
Revenue Next 5Y6.2%
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 stable.
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
ARCO is valuated correctly with a Price/Earnings ratio of 13.32.
ARCO's Price/Earnings ratio is rather cheap when compared to the industry. ARCO is cheaper than 80.30% of the companies in the same industry.
ARCO is valuated rather cheaply when we compare the Price/Earnings ratio to 26.31, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 10.46, which indicates a very decent valuation of ARCO.
Based on the Price/Forward Earnings ratio, ARCO is valued cheaper than 87.88% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ARCO to the average of the S&P500 Index (36.56), we can say ARCO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.32 | ||
| Fwd PE | 10.46 |
4.2 Price Multiples
ARCO's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ARCO is cheaper than 94.70% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 4.71 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)1.17
EPS Next 2Y0.39%
EPS Next 3Y8.11%
5. Dividend
5.1 Amount
ARCO has a Yearly Dividend Yield of 3.28%. 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 7.72. ARCO pays more dividend than 87.12% of the companies in the same industry.
ARCO's Dividend Yield is a higher than the S&P500 average which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.28% |
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
ARCO pays out 38.85% of its income as dividend. This is a sustainable payout ratio.
ARCO's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP38.85%
EPS Next 2Y0.39%
EPS Next 3Y8.11%
7.59
+0.28 (+3.83%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners43.24%
Inst Owner Change2.83%
Ins Owners4.55%
Ins Owner ChangeN/A
Market Cap1.60B
Revenue(TTM)4.47B
Net Income(TTM)130.13M
Analysts81.43
Price Target9.83 (29.51%)
Short Float %1.8%
Short Ratio2.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.28% |
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)-3.49%
PT rev (3m)-4.71%
EPS NQ rev (1m)-21.21%
EPS NQ rev (3m)-21.21%
EPS NY rev (1m)-0.71%
EPS NY rev (3m)-2.11%
Revenue NQ rev (1m)-0.96%
Revenue NQ rev (3m)1.06%
Revenue NY rev (1m)-0.06%
Revenue NY rev (3m)0.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.32 | ||
| Fwd PE | 10.46 | ||
| P/S | 0.36 | ||
| P/FCF | N/A | ||
| P/OCF | 6.13 | ||
| P/B | 2.76 | ||
| P/tB | 3.67 | ||
| EV/EBITDA | 4.71 |
EPS(TTM)0.57
EY7.51%
EPS(NY)0.73
Fwd EY9.56%
FCF(TTM)-0.1
FCFYN/A
OCF(TTM)1.24
OCFY16.31%
SpS21.35
BVpS2.75
TBVpS2.07
PEG (NY)N/A
PEG (5Y)1.17
Graham Number5.94
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
ROICexgc growth 3Y20.8%
ROICexgc 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 | 2.18 |
F-Score4
WACC7.6%
ROIC/WACC0.9
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)-18.57%
EPS 3Y45.99%
EPS 5Y11.38%
EPS Q2Q%-29.41%
EPS Next Y-15.41%
EPS Next 2Y0.39%
EPS Next 3Y8.11%
EPS Next 5Y9.48%
Revenue 1Y (TTM)3.19%
Revenue growth 3Y18.89%
Revenue growth 5Y8.6%
Sales Q2Q%5.22%
Revenue Next Year4.41%
Revenue Next 2Y6.01%
Revenue Next 3Y6.68%
Revenue Next 5Y6.2%
EBIT growth 1Y-7.72%
EBIT growth 3Y34.81%
EBIT growth 5Y15.08%
EBIT Next Year63.77%
EBIT Next 3Y27.34%
EBIT Next 5Y18.85%
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%
ARCOS DORADOS HOLDINGS INC-A / ARCO FAQ
Can you provide the ChartMill fundamental rating for ARCOS DORADOS HOLDINGS INC-A?
ChartMill assigns a fundamental rating of 4 / 10 to ARCO.
What is the valuation status for ARCO stock?
ChartMill assigns a valuation rating of 5 / 10 to ARCOS DORADOS HOLDINGS INC-A (ARCO). This can be considered as Fairly Valued.
What is the profitability of ARCO stock?
ARCOS DORADOS HOLDINGS INC-A (ARCO) has a profitability rating of 5 / 10.
Can you provide the PE and PB ratios for ARCO stock?
The Price/Earnings (PE) ratio for ARCOS DORADOS HOLDINGS INC-A (ARCO) is 13.32 and the Price/Book (PB) ratio is 2.76.
How sustainable is the dividend of ARCOS DORADOS HOLDINGS INC-A (ARCO) stock?
The dividend rating of ARCOS DORADOS HOLDINGS INC-A (ARCO) is 6 / 10 and the dividend payout ratio is 38.85%.