ARCOS DORADOS HOLDINGS INC-A (ARCO)
VGG0457F1071 - Common Stock
ARCO gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 134 industry peers in the Hotels, Restaurants & Leisure industry. ARCO has a medium profitability rating, but doesn't score so well on its financial health evaluation. 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.
ARCO had a positive operating cash flow in the past year.
Of the past 5 years ARCO 4 years were profitable.
ARCO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ARCO's Return On Assets of 5.89% is fine compared to the rest of the industry. ARCO outperforms 73.88% of its industry peers.
Looking at the Return On Equity, with a value of 36.35%, ARCO belongs to the top of the industry, outperforming 85.82% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 9.49%, ARCO is in the better half of the industry, outperforming 70.15% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ARCO is below the industry average of 10.22%.
The 3 year average ROIC (7.73%) for ARCO is below the current ROIC(9.49%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.89% | ||
| ROE | 36.35% | ||
| ROIC | 9.49% |
ROA(3y)4.42%
ROA(5y)1.97%
ROE(3y)33.06%
ROE(5y)8.49%
ROIC(3y)7.73%
ROIC(5y)N/A
1.3 Margins
The Profit Margin of ARCO (3.80%) is comparable to the rest of the industry.
ARCO's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 7.00%, ARCO is in line with its industry, outperforming 43.28% of the companies in the same industry.
ARCO's Operating Margin has improved in the last couple of years.
The Gross Margin of ARCO (13.40%) is worse than 90.30% of its industry peers.
ARCO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7% | ||
| PM (TTM) | 3.8% | ||
| GM | 13.4% |
OM growth 3YN/A
OM growth 5Y13.12%
PM growth 3YN/A
PM growth 5Y28.5%
GM growth 3Y13.38%
GM growth 5Y12.86%
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.
Compared to 1 year ago, ARCO has more shares outstanding
The number of shares outstanding for ARCO remains at a similar level compared to 5 years ago.
ARCO has a better debt/assets ratio than last year.
2.2 Solvency
ARCO has an Altman-Z score of 2.50. 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.
With a decent Altman-Z score value of 2.50, ARCO is doing good in the industry, outperforming 76.12% of the companies in the same industry.
A Debt/Equity ratio of 1.60 is on the high side and indicates that ARCO has dependencies on debt financing.
ARCO's Debt to Equity ratio of 1.60 is in line compared to the rest of the industry. ARCO outperforms 56.72% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.6 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.5 |
ROIC/WACC1.11
WACC8.53%
2.3 Liquidity
A Current Ratio of 0.63 indicates that ARCO may have some problems paying its short term obligations.
ARCO has a worse Current ratio (0.63) than 69.40% of its industry peers.
ARCO has a Quick Ratio of 0.63. This is a bad value and indicates that ARCO is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.57, ARCO is doing worse than 69.40% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.63 | ||
| Quick Ratio | 0.57 |
3. Growth
3.1 Past
ARCO shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 1.25%.
ARCO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.81% yearly.
ARCO shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.12%.
Measured over the past years, ARCO shows a small growth in Revenue. The Revenue has been growing by 7.05% on average per year.
EPS 1Y (TTM)1.25%
EPS 3YN/A
EPS 5Y16.81%
EPS Q2Q%0%
Revenue 1Y (TTM)13.12%
Revenue growth 3Y29.73%
Revenue growth 5Y7.05%
Sales Q2Q%6.76%
3.2 Future
The Earnings Per Share is expected to grow by 10.77% on average over the next years. This is quite good.
Based on estimates for the next years, ARCO will show a small growth in Revenue. The Revenue will grow by 6.80% on average per year.
EPS Next Y-21.14%
EPS Next 2Y-1.15%
EPS Next 3Y4.24%
EPS Next 5Y10.77%
Revenue Next Year4.82%
Revenue Next 2Y6.41%
Revenue Next 3Y7.66%
Revenue Next 5Y6.8%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past 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 stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 10.59, the valuation of ARCO can be described as very reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of ARCO indicates a rather cheap valuation: ARCO is cheaper than 94.03% of the companies listed in the same industry.
ARCO is valuated cheaply when we compare the Price/Earnings ratio to 30.20, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 10.33, the valuation of ARCO can be described as reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ARCO indicates a rather cheap valuation: ARCO is cheaper than 91.79% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.28, ARCO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.59 | ||
| Fwd PE | 10.33 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ARCO is valued cheaper than 91.04% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 4.81 |
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)0.63
EPS Next 2Y-1.15%
EPS Next 3Y4.24%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.72%, ARCO has a reasonable but not impressive dividend return.
ARCO's Dividend Yield is rather good when compared to the industry average which is at 2.91. ARCO pays more dividend than 85.07% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.26, ARCO pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.72% |
5.2 History
On average, the dividend of ARCO grows each year by 14.41%, which is quite nice.
ARCO has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of ARCO decreased in the last 3 years.
Dividend Growth(5Y)14.41%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
25.91% of the earnings are spent on dividend by ARCO. This is a low number and sustainable payout ratio.
The dividend of ARCO is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP25.91%
EPS Next 2Y-1.15%
EPS Next 3Y4.24%
ARCOS DORADOS HOLDINGS INC-A
NYSE:ARCO (11/4/2024, 8:04:00 PM)
After market: 8.58 0 (0%)8.58
+0.1 (+1.18%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap1.81B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.72% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.59 | ||
| Fwd PE | 10.33 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)0.63
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.89% | ||
| ROE | 36.35% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 7% | ||
| PM (TTM) | 3.8% | ||
| GM | 13.4% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.55
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.6 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.63 | ||
| Quick Ratio | 0.57 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)1.25%
EPS 3YN/A
EPS 5Y
EPS Q2Q%
EPS Next Y-21.14%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)13.12%
Revenue growth 3Y29.73%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y