ARCOS DORADOS HOLDINGS INC-A (ARCO) Stock Fundamental Analysis
USA - NYSE:ARCO - VGG0457F1071 - Common Stock
7.29 USD
-0.04 (-0.55%)
7.29 USD
0 (0%)
Overall ARCO gets a fundamental rating of 4 out of 10. We evaluated ARCO against 132 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 is not valued too expensively and it also shows a decent growth rate.
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.
In the past 5 years ARCO always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.86%, ARCO is in line with its industry, outperforming 56.82% of the companies in the same industry.
ARCO has a Return On Equity of 22.43%. This is in the better half of the industry: ARCO outperforms 78.79% of its industry peers.
ARCO has a Return On Invested Capital (6.82%) which is in line with its industry peers.
ARCO had an Average Return On Invested Capital over the past 3 years of 8.93%. This is in line with the industry average of 10.74%.
| 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 in line with its industry peers.
In the last couple of years the Operating Margin of ARCO has grown nicely.
ARCO has a Gross Margin of 12.53%. This is amonst the worse of the industry: ARCO underperforms 90.15% 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.
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
Compared to 1 year ago, ARCO has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.16 indicates that ARCO is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.16, ARCO is in the better half of the industry, outperforming 61.36% 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.
ARCO has a Debt to Equity ratio (1.68) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.16 |
ROIC/WACC0.92
WACC7.44%
2.3 Liquidity
ARCO has a Current Ratio of 0.80. 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 has a Current ratio of 0.80. This is comparable to the rest of the industry: ARCO outperforms 41.67% of its industry peers.
A Quick Ratio of 0.73 indicates that ARCO may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.73, ARCO is doing worse than 60.61% of the companies in the same industry.
| 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 -18.57% in the last year.
Measured over the past years, ARCO shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.38% on average per year.
ARCO shows a small growth in Revenue. In the last year, the Revenue has grown by 3.19%.
The Revenue has been growing by 8.60% on average over the past years. This is quite good.
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.
The Revenue is expected to grow by 6.20% on average over the next years.
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
The Price/Earnings ratio is 12.79, which indicates a correct valuation of ARCO.
Based on the Price/Earnings ratio, ARCO is valued cheaper than 81.82% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 25.89. ARCO is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 10.05, the valuation of ARCO can be described as very reasonable.
86.36% of the companies in the same industry are more expensive than ARCO, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 34.59, ARCO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.79 | ||
| Fwd PE | 10.05 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ARCO is valued cheaply inside the industry as 93.94% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 4.57 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)1.12
EPS Next 2Y0.39%
EPS Next 3Y8.11%
5. Dividend
5.1 Amount
ARCO has a Yearly Dividend Yield of 3.27%. 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 4.55. ARCO pays more dividend than 84.85% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, ARCO pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.27% |
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.
The dividend of ARCO is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP38.85%
EPS Next 2Y0.39%
EPS Next 3Y8.11%
7.29
-0.04 (-0.55%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners43.24%
Inst Owner Change5.81%
Ins Owners4.55%
Ins Owner ChangeN/A
Market Cap1.54B
Revenue(TTM)4.47B
Net Income(TTM)130.13M
Analysts81.43
Price Target9.97 (36.76%)
Short Float %2.04%
Short Ratio3.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.27% |
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)-2.15%
PT rev (3m)-4.07%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)-2.31%
EPS NY rev (3m)-3.88%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.04%
Revenue NY rev (1m)-0.06%
Revenue NY rev (3m)0.21%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.79 | ||
| Fwd PE | 10.05 | ||
| P/S | 0.34 | ||
| P/FCF | N/A | ||
| P/OCF | 5.89 | ||
| P/B | 2.65 | ||
| P/tB | 3.52 | ||
| EV/EBITDA | 4.57 |
EPS(TTM)0.57
EY7.82%
EPS(NY)0.73
Fwd EY9.95%
FCF(TTM)-0.1
FCFYN/A
OCF(TTM)1.24
OCFY16.99%
SpS21.35
BVpS2.75
TBVpS2.07
PEG (NY)N/A
PEG (5Y)1.12
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 | 2.16 |
F-Score4
WACC7.44%
ROIC/WACC0.92
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 12.79 and the Price/Book (PB) ratio is 2.65.
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%.