ARCOS DORADOS HOLDINGS INC-A (ARCO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ARCO - VGG0457F1071 - Common Stock
7.25 USD
-0.01 (-0.14%)
7.4 USD
+0.15 (+2.07%)
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. While ARCO is still in line with the averages on profitability rating, there are concerns on its financial health. ARCO is not valued too expensively and it also shows a decent growth rate. ARCO also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
ARCO had positive earnings in the past year.
ARCO had a positive operating cash flow in the past year.
ARCO had positive earnings in 4 of the past 5 years.
Each year in the past 5 years ARCO had a positive operating cash flow.
1.2 Ratios
ARCO has a Return On Assets of 6.88%. This is in the better half of the industry: ARCO outperforms 75.00% of its industry peers.
ARCO has a Return On Equity of 32.94%. This is amongst the best in the industry. ARCO outperforms 84.09% of its industry peers.
Looking at the Return On Invested Capital, with a value of 7.78%, ARCO is in the better half of the industry, outperforming 62.88% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ARCO is in line with the industry average of 10.40%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.88% | ||
| ROE | 32.94% | ||
| ROIC | 7.78% |
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
Looking at the Profit Margin, with a value of 5.39%, ARCO is in line with its industry, outperforming 56.06% of the companies in the same industry.
In the last couple of years the Profit Margin of ARCO has grown nicely.
ARCO has a Operating Margin of 7.85%. This is comparable to the rest of the industry: ARCO outperforms 48.48% of its industry peers.
In the last couple of years the Operating Margin of ARCO has grown nicely.
With a Gross Margin value of 12.39%, ARCO is not doing good in the industry: 90.15% of the companies in the same industry are doing better.
ARCO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.85% | ||
| PM (TTM) | 5.39% | ||
| GM | 12.39% |
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.
The number of shares outstanding for ARCO remains at a similar level compared to 1 year ago.
Compared to 5 years ago, ARCO has more shares outstanding
The debt/assets ratio for ARCO is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.22 indicates that ARCO is not a great score, but indicates only limited risk for bankruptcy at the moment.
ARCO has a better Altman-Z score (2.22) than 61.36% of its industry peers.
The Debt to FCF ratio of ARCO is 383.76, which is on the high side as it means it would take ARCO, 383.76 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 383.76, ARCO is not doing good in the industry: 62.88% of the companies in the same industry are doing better.
A Debt/Equity ratio of 1.32 is on the high side and indicates that ARCO has dependencies on debt financing.
ARCO has a Debt to Equity ratio of 1.32. This is comparable to the rest of the industry: ARCO outperforms 56.82% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.32 | ||
| Debt/FCF | 383.76 | ||
| Altman-Z | 2.22 |
ROIC/WACC0.99
WACC7.83%
2.3 Liquidity
ARCO has a Current Ratio of 0.89. This is a bad value and indicates that ARCO is not financially healthy enough and could expect problems in meeting its short term obligations.
ARCO's Current ratio of 0.89 is in line compared to the rest of the industry. ARCO outperforms 46.21% of its industry peers.
A Quick Ratio of 0.81 indicates that ARCO may have some problems paying its short term obligations.
The Quick ratio of ARCO (0.81) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
The earnings per share for ARCO have decreased strongly by -18.57% in the last year.
ARCO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.38% yearly.
The Revenue has been growing slightly by 1.21% in the past year.
Measured over the past years, ARCO shows a quite strong growth in Revenue. The Revenue has been growing by 8.60% on average per year.
EPS 1Y (TTM)-18.57%
EPS 3Y45.99%
EPS 5Y11.38%
EPS Q2Q%-29.41%
Revenue 1Y (TTM)1.21%
Revenue growth 3Y18.89%
Revenue growth 5Y8.6%
Sales Q2Q%5.22%
3.2 Future
ARCO is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.48% yearly.
ARCO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.20% yearly.
EPS Next Y-18.31%
EPS Next 2Y-1.44%
EPS Next 3Y6.05%
EPS Next 5Y9.48%
Revenue Next Year3.8%
Revenue Next 2Y5.56%
Revenue Next 3Y6.2%
Revenue Next 5Y6.2%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 12.72, the valuation of ARCO can be described as correct.
Based on the Price/Earnings ratio, ARCO is valued cheaper than 83.33% of the companies in the same industry.
When comparing the Price/Earnings ratio of ARCO to the average of the S&P500 Index (26.22), we can say ARCO is valued rather cheaply.
ARCO is valuated reasonably with a Price/Forward Earnings ratio of 10.37.
87.88% of the companies in the same industry are more expensive than ARCO, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 23.58. ARCO is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.72 | ||
| Fwd PE | 10.37 |
4.2 Price Multiples
94.70% of the companies in the same industry are more expensive than ARCO, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ARCO indicates a slightly more expensive valuation: ARCO is more expensive than 62.12% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 591.28 | ||
| EV/EBITDA | 4 |
4.3 Compensation for Growth
ARCO has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.12
EPS Next 2Y-1.44%
EPS Next 3Y6.05%
5. Dividend
5.1 Amount
ARCO has a Yearly Dividend Yield of 3.23%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 1.48, ARCO pays a better dividend. On top of this ARCO pays more dividend than 89.39% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 1.87, ARCO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.23% |
5.2 History
The dividend of ARCO is nicely growing with an annual growth rate of 17.60%!
ARCO has paid a dividend for at least 10 years, which is 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
20.61% 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.
DP20.61%
EPS Next 2Y-1.44%
EPS Next 3Y6.05%
7.25
-0.01 (-0.14%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners48.65%
Inst Owner Change2.83%
Ins Owners4.55%
Ins Owner ChangeN/A
Market Cap1.53B
Revenue(TTM)4.56B
Net Income(TTM)245.35M
Analysts81.43
Price Target9.82 (35.45%)
Short Float %2.19%
Short Ratio3.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.23% |
Yearly Dividend0.24
Dividend Growth(5Y)17.6%
DP20.61%
Div Incr Years2
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)9.18%
Min EPS beat(2)-9.5%
Max EPS beat(2)27.87%
EPS beat(4)2
Avg EPS beat(4)1.68%
Min EPS beat(4)-40.32%
Max EPS beat(4)28.68%
EPS beat(8)3
Avg EPS beat(8)-3.98%
EPS beat(12)6
Avg EPS beat(12)2.22%
EPS beat(16)9
Avg EPS beat(16)15.63%
Revenue beat(2)0
Avg Revenue beat(2)-2.7%
Min Revenue beat(2)-3.88%
Max Revenue beat(2)-1.53%
Revenue beat(4)1
Avg Revenue beat(4)-2.01%
Min Revenue beat(4)-3.88%
Max Revenue beat(4)0.15%
Revenue beat(8)4
Avg Revenue beat(8)-0.22%
Revenue beat(12)7
Avg Revenue beat(12)-0.09%
Revenue beat(16)10
Avg Revenue beat(16)0.8%
PT rev (1m)-1.5%
PT rev (3m)-2.21%
EPS NQ rev (1m)-2.04%
EPS NQ rev (3m)-2.04%
EPS NY rev (1m)-3.43%
EPS NY rev (3m)-5.46%
Revenue NQ rev (1m)-3.45%
Revenue NQ rev (3m)-3.45%
Revenue NY rev (1m)-0.59%
Revenue NY rev (3m)-0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.72 | ||
| Fwd PE | 10.37 | ||
| P/S | 0.34 | ||
| P/FCF | 591.28 | ||
| P/OCF | 5.64 | ||
| P/B | 2.05 | ||
| P/tB | 2.55 | ||
| EV/EBITDA | 4 |
EPS(TTM)0.57
EY7.86%
EPS(NY)0.7
Fwd EY9.65%
FCF(TTM)0.01
FCFY0.17%
OCF(TTM)1.29
OCFY17.74%
SpS21.63
BVpS3.54
TBVpS2.84
PEG (NY)N/A
PEG (5Y)1.12
Graham Number6.73
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.88% | ||
| ROE | 32.94% | ||
| ROCE | 12.62% | ||
| ROIC | 7.78% | ||
| ROICexc | 8.55% | ||
| ROICexgc | 9.07% | ||
| OM | 7.85% | ||
| PM (TTM) | 5.39% | ||
| GM | 12.39% | ||
| FCFM | 0.06% |
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-Score5
Asset Turnover1.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.32 | ||
| Debt/FCF | 383.76 | ||
| Debt/EBITDA | 1.8 | ||
| Cap/Depr | 142.32% | ||
| Cap/Sales | 5.89% | ||
| Interest Coverage | 5.16 | ||
| Cash Conversion | 49.6% | ||
| Profit Quality | 1.05% | ||
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.81 | ||
| Altman-Z | 2.22 |
F-Score5
WACC7.83%
ROIC/WACC0.99
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-18.31%
EPS Next 2Y-1.44%
EPS Next 3Y6.05%
EPS Next 5Y9.48%
Revenue 1Y (TTM)1.21%
Revenue growth 3Y18.89%
Revenue growth 5Y8.6%
Sales Q2Q%5.22%
Revenue Next Year3.8%
Revenue Next 2Y5.56%
Revenue Next 3Y6.2%
Revenue Next 5Y6.2%
EBIT growth 1Y17.91%
EBIT growth 3Y34.81%
EBIT growth 5Y15.08%
EBIT Next Year64.67%
EBIT Next 3Y25.41%
EBIT Next 5Y18.85%
FCF growth 1Y-87.93%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-20.84%
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 6 / 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 12.72 and the Price/Book (PB) ratio is 2.05.
How sustainable is the dividend of ARCOS DORADOS HOLDINGS INC-A (ARCO) stock?
The dividend rating of ARCOS DORADOS HOLDINGS INC-A (ARCO) is 7 / 10 and the dividend payout ratio is 20.61%.