ARCOS DORADOS HOLDINGS INC-A (ARCO) Stock Fundamental Analysis
NYSE:ARCO - VGG0457F1071 - Common Stock
7 USD
-0.15 (-2.1%)
7 USD
0 (0%)
Taking everything into account, ARCO scores 4 out of 10 in our fundamental rating. ARCO was compared to 133 industry peers in the Hotels, Restaurants & Leisure industry. While ARCO is still in line with the averages on profitability rating, there are concerns on its financial health. 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.
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
ARCO's Return On Assets of 3.86% is in line compared to the rest of the industry. ARCO outperforms 58.21% of its industry peers.
The Return On Equity of ARCO (22.43%) is better than 79.85% 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 significantly below the industry average of 16.25%.
| 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 (2.89%) which is comparable to the rest of the industry.
ARCO's Profit Margin has improved in the last couple of years.
ARCO has a Operating Margin of 6.46%. This is comparable to the rest of the industry: ARCO outperforms 44.03% of 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 12.53%, ARCO is doing worse than 90.30% 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 | 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ARCO is still creating some value.
Compared to 1 year ago, ARCO has about the same amount of shares outstanding.
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 2.15 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.
ARCO has a Debt/Equity ratio of 1.68. This is a high value indicating a heavy dependency on external financing.
ARCO has a Debt to Equity ratio (1.68) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.15 |
ROIC/WACC0.81
WACC8.41%
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.
Looking at the Current ratio, with a value of 0.80, ARCO is in line with its industry, outperforming 43.28% of the companies in the same industry.
A Quick Ratio of 0.73 indicates that ARCO may have some problems paying its short term obligations.
The Quick ratio of ARCO (0.73) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.73 |
3. Growth
3.1 Past
ARCO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -23.46%.
ARCO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.38% yearly.
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
ARCO is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.78% yearly.
The Revenue is expected to grow by 6.48% on average over the next years.
EPS Next Y-13.58%
EPS Next 2Y2.65%
EPS Next 3Y9.23%
EPS Next 5Y6.78%
Revenue Next Year4.26%
Revenue Next 2Y6.14%
Revenue Next 3Y7.05%
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
Based on the Price/Earnings ratio of 11.29, the valuation of ARCO can be described as reasonable.
Based on the Price/Earnings ratio, ARCO is valued cheaper than 91.04% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.08, ARCO is valued rather cheaply.
A Price/Forward Earnings ratio of 9.23 indicates a reasonable valuation of ARCO.
92.54% of the companies in the same industry are more expensive than ARCO, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.72. ARCO is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.29 | ||
| Fwd PE | 9.23 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ARCO is valued cheaper than 95.52% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 4.44 |
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 3.36%.
Compared to an average industry Dividend Yield of 4.10, ARCO pays a better dividend. On top of this ARCO pays more dividend than 85.07% of the companies listed in the same industry.
ARCO's Dividend Yield is a higher than the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.36% |
5.2 History
The dividend of ARCO is nicely growing with an annual growth rate of 17.60%!
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%
7
-0.15 (-2.1%)
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 Target10.32 (47.43%)
Short Float %2.24%
Short Ratio3.05
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.36% |
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)-0.7%
PT rev (3m)-4.52%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-17.5%
EPS NY rev (1m)-1.81%
EPS NY rev (3m)-11.43%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.99%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)0.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.29 | ||
| Fwd PE | 9.23 | ||
| P/S | 0.33 | ||
| P/FCF | N/A | ||
| P/OCF | 5.65 | ||
| P/B | 2.54 | ||
| P/tB | 3.38 | ||
| EV/EBITDA | 4.44 |
EPS(TTM)0.62
EY8.86%
EPS(NY)0.76
Fwd EY10.84%
FCF(TTM)-0.1
FCFYN/A
OCF(TTM)1.24
OCFY17.69%
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
WACC8.41%
ROIC/WACC0.81
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 Year4.26%
Revenue Next 2Y6.14%
Revenue Next 3Y7.05%
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%