ARCOS DORADOS HOLDINGS INC-A (ARCO) Stock Fundamental Analysis
USA - NYSE:ARCO - VGG0457F1071 - Common Stock
6.98 USD
+0.01 (+0.14%)
6.9851 USD
+0.01 (+0.07%)
We assign a fundamental rating of 4 out of 10 to ARCO. ARCO was compared to 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 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
Looking at the Return On Assets, with a value of 3.86%, ARCO is in line with its industry, outperforming 58.21% of the companies in the same industry.
ARCO has a better Return On Equity (22.43%) than 80.60% 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 58.21% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ARCO is significantly below the industry average of 15.67%.
| 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
Looking at the Profit Margin, with a value of 2.89%, ARCO is in line with its industry, outperforming 47.76% 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 (6.46%) which is comparable to the rest of the industry.
ARCO's Operating Margin has improved in the last couple of years.
With a Gross Margin value of 12.53%, ARCO is not doing good in the industry: 90.30% of the companies in the same industry are doing better.
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.
Compared to 5 years ago, ARCO has more shares outstanding
ARCO has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.15 indicates that ARCO is not a great score, but indicates only limited risk for bankruptcy at the moment.
ARCO has a Altman-Z score (2.15) which is comparable to the rest of the industry.
A Debt/Equity ratio of 1.68 is on the high side and indicates that ARCO has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.68, ARCO is in line with its industry, outperforming 53.73% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.15 |
ROIC/WACC0.83
WACC8.25%
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's Current ratio of 0.80 is in line compared to the rest of the industry. ARCO outperforms 43.28% of its industry peers.
ARCO has a Quick 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.
Looking at the Quick ratio, with a value of 0.73, ARCO is in line with its industry, outperforming 43.28% 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 -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.
ARCO shows a small growth in Revenue. In the last year, the Revenue has grown by 0.09%.
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)-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.
Based on estimates for the next years, ARCO will show a small growth in Revenue. The Revenue will grow by 6.48% on average per year.
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
ARCO is valuated reasonably with a Price/Earnings ratio of 11.26.
Based on the Price/Earnings ratio, ARCO is valued cheaply inside the industry as 91.04% of the companies are valued more expensively.
ARCO is valuated cheaply when we compare the Price/Earnings ratio to 27.41, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 9.20, which indicates a very decent valuation of ARCO.
Based on the Price/Forward Earnings ratio, ARCO is valued cheaper than 91.79% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.87. ARCO is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.26 | ||
| Fwd PE | 9.2 |
4.2 Price Multiples
ARCO's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ARCO is cheaper than 94.78% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 4.43 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)0.99
EPS Next 2Y2.65%
EPS Next 3Y9.23%
5. Dividend
5.1 Amount
ARCO has a Yearly Dividend Yield of 3.56%.
Compared to an average industry Dividend Yield of 6.79, ARCO pays a better dividend. On top of this ARCO pays more dividend than 85.82% of the companies listed in the same industry.
ARCO's Dividend Yield is a higher than the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.56% |
5.2 History
On average, the dividend of ARCO grows each year by 17.60%, which is quite nice.
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
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 2Y2.65%
EPS Next 3Y9.23%
6.98
+0.01 (+0.14%)
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 Cap1.47B
Analysts81.43
Price Target10.04 (43.84%)
Short Float %1.75%
Short Ratio2.45
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.56% |
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)0%
EPS NY rev (3m)-8.96%
Revenue NQ rev (1m)2.04%
Revenue NQ rev (3m)0.48%
Revenue NY rev (1m)-0.13%
Revenue NY rev (3m)-0.36%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.26 | ||
| Fwd PE | 9.2 | ||
| P/S | 0.33 | ||
| P/FCF | N/A | ||
| P/OCF | 5.64 | ||
| P/B | 2.53 | ||
| P/tB | 3.37 | ||
| EV/EBITDA | 4.43 |
EPS(TTM)0.62
EY8.88%
EPS(NY)0.76
Fwd EY10.87%
FCF(TTM)-0.1
FCFYN/A
OCF(TTM)1.24
OCFY17.74%
SpS21.35
BVpS2.75
TBVpS2.07
PEG (NY)N/A
PEG (5Y)0.99
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 | 2.15 |
F-Score4
WACC8.25%
ROIC/WACC0.83
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%