ARCOS DORADOS HOLDINGS INC-A (ARCO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ARCO - VGG0457F1071 - Common Stock
7.2 USD
-0.05 (-0.69%)
7.2 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to ARCO. ARCO was compared to 133 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. ARCO also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year ARCO was profitable.
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 6.88%, ARCO is in the better half of the industry, outperforming 75.19% of the companies in the same industry.
The Return On Equity of ARCO (32.94%) is better than 84.21% of its industry peers.
ARCO's Return On Invested Capital of 7.78% is fine compared to the rest of the industry. ARCO outperforms 63.16% of 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 10.40%.
| 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.
In the last couple of years the Profit Margin of ARCO has grown nicely.
Looking at the Operating Margin, with a value of 7.85%, ARCO is in line with its industry, outperforming 48.87% of the companies in the same industry.
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 89.47% 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ARCO is still creating some value.
The number of shares outstanding for ARCO remains at a similar level compared to 1 year ago.
The number of shares outstanding for ARCO has been increased compared to 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.
ARCO has a better Altman-Z score (2.22) than 60.90% of its industry peers.
ARCO has a debt to FCF ratio of 383.76. This is a negative value and a sign of low solvency as ARCO would need 383.76 years to pay back of all of its debts.
With a Debt to FCF ratio value of 383.76, ARCO is not doing good in the industry: 62.41% 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.
Looking at the Debt to Equity ratio, with a value of 1.32, ARCO is in line with its industry, outperforming 57.14% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.32 | ||
| Debt/FCF | 383.76 | ||
| Altman-Z | 2.22 |
ROIC/WACC0.99
WACC7.84%
2.3 Liquidity
A Current Ratio of 0.89 indicates that ARCO may have some problems paying its short term obligations.
ARCO has a Current ratio (0.89) which is comparable to the rest of the 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.
ARCO has a Quick ratio of 0.81. This is comparable to the rest of the industry: ARCO outperforms 45.86% of its industry peers.
| 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.
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.
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
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.
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.
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
The Price/Earnings ratio is 12.63, which indicates a correct valuation of ARCO.
83.46% of the companies in the same industry are more expensive than ARCO, based on the Price/Earnings ratio.
ARCO is valuated cheaply when we compare the Price/Earnings ratio to 26.39, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 10.29, the valuation of ARCO can be described as very reasonable.
87.97% of the companies in the same industry are more expensive than ARCO, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of ARCO to the average of the S&P500 Index (23.84), we can say ARCO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.63 | ||
| Fwd PE | 10.29 |
4.2 Price Multiples
94.74% of the companies in the same industry are more expensive than ARCO, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, ARCO is valued a bit more expensive than 61.65% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 587.2 | ||
| EV/EBITDA | 3.99 |
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)1.11
EPS Next 2Y-1.44%
EPS Next 3Y6.05%
5. Dividend
5.1 Amount
ARCO has a Yearly Dividend Yield of 3.31%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 1.54, ARCO pays a better dividend. On top of this ARCO pays more dividend than 89.47% 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 | 3.31% |
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
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%
7.2
-0.05 (-0.69%)
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 Cap1.52B
Revenue(TTM)4.56B
Net Income(TTM)245.35M
Analysts81.43
Price Target9.82 (36.39%)
Short Float %2.19%
Short Ratio3.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.31% |
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)-0.13%
PT rev (3m)-2.21%
EPS NQ rev (1m)2.13%
EPS NQ rev (3m)-2.04%
EPS NY rev (1m)-3.43%
EPS NY rev (3m)-5.46%
Revenue NQ rev (1m)-2.85%
Revenue NQ rev (3m)-3.45%
Revenue NY rev (1m)-0.59%
Revenue NY rev (3m)-0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.63 | ||
| Fwd PE | 10.29 | ||
| P/S | 0.33 | ||
| P/FCF | 587.2 | ||
| P/OCF | 5.6 | ||
| P/B | 2.04 | ||
| P/tB | 2.53 | ||
| EV/EBITDA | 3.99 |
EPS(TTM)0.57
EY7.92%
EPS(NY)0.7
Fwd EY9.71%
FCF(TTM)0.01
FCFY0.17%
OCF(TTM)1.29
OCFY17.87%
SpS21.63
BVpS3.54
TBVpS2.84
PEG (NY)N/A
PEG (5Y)1.11
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
WACC7.84%
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 12.63 and the Price/Book (PB) ratio is 2.04.
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%.