ARCOS DORADOS HOLDINGS INC-A (ARCO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ARCO - VGG0457F1071 - Common Stock
7.26 USD
-0.14 (-1.89%)
7.26 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. There are concerns on the financial health of ARCO while its profitability can be described as average. 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
In the past year ARCO was profitable.
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.
With an excellent Return On Equity value of 32.94%, ARCO belongs to the best of the industry, outperforming 84.09% of the companies in the same industry.
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.
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 10.40%.
| 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
ARCO has a Profit Margin (5.39%) which is in line with its industry peers.
ARCO's Profit Margin has improved in the last couple of years.
ARCO has a Operating Margin (7.85%) which is in line with its industry peers.
In the last couple of years the Operating Margin of ARCO has grown nicely.
Looking at the Gross Margin, with a value of 12.39%, ARCO is doing worse than 90.15% of the companies in the same industry.
In the last couple of years the Gross Margin of ARCO has grown nicely.
| 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.
ARCO has more shares outstanding than it did 5 years ago.
ARCO has a worse debt/assets ratio than last year.
2.2 Solvency
ARCO has an Altman-Z score of 2.22. 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.
Looking at the Altman-Z score, with a value of 2.22, ARCO is in the better half of the industry, outperforming 61.36% of the companies in the same industry.
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.
ARCO has a worse Debt to FCF ratio (383.76) than 62.88% of its industry peers.
ARCO has a Debt/Equity ratio of 1.32. This is a high value indicating a heavy dependency on external financing.
ARCO has a Debt to Equity ratio (1.32) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.32 | ||
| Debt/FCF | 383.76 | ||
| Altman-Z | 2.22 |
ROIC/WACC0.99
WACC7.86%
2.3 Liquidity
A Current Ratio of 0.89 indicates that ARCO may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.89, ARCO is in line with its industry, outperforming 46.21% of the companies in the same industry.
ARCO has a Quick 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.
Looking at the Quick ratio, with a value of 0.81, ARCO is in line with its industry, outperforming 45.45% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.81 |
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.
The Revenue has been growing slightly by 1.21% in the past year.
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)1.21%
Revenue growth 3Y18.89%
Revenue growth 5Y8.6%
Sales Q2Q%5.22%
3.2 Future
The Earnings Per Share is expected to grow by 9.48% 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 6.20% on average per year.
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.
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 12.74, which indicates a correct valuation of ARCO.
Based on the Price/Earnings ratio, ARCO is valued cheaply inside the industry as 83.33% of the companies are valued more expensively.
ARCO's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.43.
The Price/Forward Earnings ratio is 10.38, which indicates a very decent valuation of ARCO.
ARCO's Price/Forward Earnings ratio is rather cheap when compared to the industry. ARCO is cheaper than 86.36% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.66. ARCO is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.74 | ||
| Fwd PE | 10.38 |
4.2 Price Multiples
ARCO's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ARCO is cheaper than 95.45% of the companies in the same industry.
ARCO's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. ARCO is more expensive than 62.12% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 592.1 | ||
| EV/EBITDA | 4.01 |
4.3 Compensation for Growth
The decent profitability rating of ARCO 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
With a Yearly Dividend Yield of 3.23%, ARCO has a reasonable but not impressive dividend return.
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.
ARCO's Dividend Yield is rather good when compared to the S&P500 average which is at 1.87.
| 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 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 20.61% 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.
DP20.61%
EPS Next 2Y-1.44%
EPS Next 3Y6.05%
7.26
-0.14 (-1.89%)
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 (35.26%)
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 | 12.74 | ||
| Fwd PE | 10.38 | ||
| P/S | 0.34 | ||
| P/FCF | 592.1 | ||
| P/OCF | 5.64 | ||
| P/B | 2.05 | ||
| P/tB | 2.55 | ||
| EV/EBITDA | 4.01 |
EPS(TTM)0.57
EY7.85%
EPS(NY)0.7
Fwd EY9.63%
FCF(TTM)0.01
FCFY0.17%
OCF(TTM)1.29
OCFY17.72%
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
WACC7.86%
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 12.74 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%.