ARCOS DORADOS HOLDINGS INC-A (ARCO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ARCO - VGG0457F1071 - Common Stock
7.22 USD
+0.04 (+0.56%)
7.24 USD
+0.02 (+0.28%)
We assign a fundamental rating of 4 out of 10 to ARCO. ARCO was compared to 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 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 56.39% of its industry peers.
ARCO has a better Return On Equity (22.43%) than 78.95% 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 57.89% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ARCO is in line with the industry average of 10.64%.
| 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.
In the last couple of years the Profit Margin of ARCO has grown nicely.
Looking at the Operating Margin, with a value of 6.46%, ARCO is in line with its industry, outperforming 43.61% of the companies in the same industry.
In the last couple of years the Operating Margin of ARCO has grown nicely.
ARCO has a worse Gross Margin (12.53%) than 89.47% 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
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.
ARCO has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, ARCO has a worse debt to assets ratio.
2.2 Solvency
ARCO has an Altman-Z score of 2.16. 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's Altman-Z score of 2.16 is fine compared to the rest of the industry. ARCO outperforms 61.65% of its industry peers.
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 | 2.16 |
ROIC/WACC0.92
WACC7.42%
2.3 Liquidity
A Current Ratio of 0.80 indicates that ARCO may have some problems paying its short term obligations.
The Current ratio of ARCO (0.80) is comparable to the rest of the industry.
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.
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
The earnings per share for ARCO have decreased strongly by -18.57% in the last year.
ARCO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.38% yearly.
The Revenue has been growing slightly by 3.19% in the past year.
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)-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
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.
ARCO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.20% yearly.
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
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
With a Price/Earnings ratio of 12.67, ARCO is valued correctly.
Compared to the rest of the industry, the Price/Earnings ratio of ARCO indicates a rather cheap valuation: ARCO is cheaper than 81.95% of the companies listed in the same industry.
ARCO's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.45.
With a Price/Forward Earnings ratio of 9.95, the valuation of ARCO can be described as very reasonable.
ARCO's Price/Forward Earnings ratio is rather cheap when compared to the industry. ARCO is cheaper than 86.47% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 34.46, ARCO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.67 | ||
| Fwd PE | 9.95 |
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 4.54 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)1.11
EPS Next 2Y0.39%
EPS Next 3Y8.11%
5. Dividend
5.1 Amount
ARCO has a Yearly Dividend Yield of 3.34%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 5.24, ARCO pays a better dividend. On top of this ARCO pays more dividend than 84.21% of the companies listed 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 | 3.34% |
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.
ARCO's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP38.85%
EPS Next 2Y0.39%
EPS Next 3Y8.11%
7.22
+0.04 (+0.56%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners43.24%
Inst Owner Change-80.96%
Ins Owners4.55%
Ins Owner ChangeN/A
Market Cap1.52B
Revenue(TTM)4.47B
Net Income(TTM)130.13M
Analysts81.43
Price Target9.83 (36.15%)
Short Float %1.8%
Short Ratio2.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.34% |
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)-3.49%
PT rev (3m)-4.71%
EPS NQ rev (1m)-21.21%
EPS NQ rev (3m)-21.21%
EPS NY rev (1m)-0.71%
EPS NY rev (3m)-2.11%
Revenue NQ rev (1m)-0.96%
Revenue NQ rev (3m)1.06%
Revenue NY rev (1m)-0.06%
Revenue NY rev (3m)0.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.67 | ||
| Fwd PE | 9.95 | ||
| P/S | 0.34 | ||
| P/FCF | N/A | ||
| P/OCF | 5.83 | ||
| P/B | 2.62 | ||
| P/tB | 3.49 | ||
| EV/EBITDA | 4.54 |
EPS(TTM)0.57
EY7.89%
EPS(NY)0.73
Fwd EY10.05%
FCF(TTM)-0.1
FCFYN/A
OCF(TTM)1.24
OCFY17.15%
SpS21.35
BVpS2.75
TBVpS2.07
PEG (NY)N/A
PEG (5Y)1.11
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
WACC7.42%
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 12.67 and the Price/Book (PB) ratio is 2.62.
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%.