Analyzing Arcos Dorados Holdings (ARCO) & Carrols Restaurant Group (TAST)
Arcos Dorados Holdings (NYSE: ARCO) and Carrols Restaurant Group (NASDAQ:TAST) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.
Volatility & Risk
Arcos Dorados Holdings has a beta of 2.15, indicating that its share price is 115% more volatile than the S&P 500. Comparatively, Carrols Restaurant Group has a beta of 0.03, indicating that its share price is 97% less volatile than the S&P 500.
Earnings & Valuation
This table compares Arcos Dorados Holdings and Carrols Restaurant Group’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Arcos Dorados Holdings||$3.16 billion||0.66||$249.87 million||$0.26||37.88|
|Carrols Restaurant Group||$999.03 million||0.39||$80.24 million||$0.72||15.42|
Arcos Dorados Holdings has higher revenue and earnings than Carrols Restaurant Group. Carrols Restaurant Group is trading at a lower price-to-earnings ratio than Arcos Dorados Holdings, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
36.7% of Arcos Dorados Holdings shares are owned by institutional investors. Comparatively, 86.8% of Carrols Restaurant Group shares are owned by institutional investors. 5.6% of Carrols Restaurant Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This is a breakdown of current recommendations for Arcos Dorados Holdings and Carrols Restaurant Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Arcos Dorados Holdings||0||0||3||0||3.00|
|Carrols Restaurant Group||0||0||2||0||3.00|
Arcos Dorados Holdings presently has a consensus price target of $9.53, suggesting a potential downside of 3.21%. Carrols Restaurant Group has a consensus price target of $15.50, suggesting a potential upside of 39.64%. Given Carrols Restaurant Group’s higher probable upside, analysts plainly believe Carrols Restaurant Group is more favorable than Arcos Dorados Holdings.
This table compares Arcos Dorados Holdings and Carrols Restaurant Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Arcos Dorados Holdings||1.76%||14.68%||3.69%|
|Carrols Restaurant Group||3.44%||6.33%||1.86%|
Arcos Dorados Holdings beats Carrols Restaurant Group on 7 of the 13 factors compared between the two stocks.
About Arcos Dorados Holdings
Arcos Dorados Holdings Inc. is a McDonald’s franchisee. The Company operates or franchises over 2,140 McDonald’s-branded restaurants. It divides its operations into four geographical divisions: Brazil; the Caribbean division, consisting of Aruba, Colombia, Curacao, French Guiana, Guadeloupe, Martinique, Puerto Rico, Trinidad and Tobago, the United States Virgin Islands of Saint Croix and Saint Thomas, and Venezuela; the North Latin America division (NOLAD), consisting of Costa Rica, Mexico and Panama, and the South Latin America division (SLAD), consisting of Argentina, Chile, Ecuador, Peru and Uruguay. Its menus feature over three tiers of products: entry-level options, such as its Big Pleasures, Small Prices offerings and Almuerzos Colombianos (Colombian Lunches) in Colombia; core menu options, such as the Big Mac, Happy Meal and Quarter Pounder, and premium options, such as Big Tasty or Angus premium hamburgers and chicken sandwiches and low-calorie or low-sodium products.
About Carrols Restaurant Group
Carrols Restaurant Group, Inc. is a holding company and conducts all of its operations through its subsidiary, Carrols Corporation (Carrols) and Carrols’ subsidiary, Carrols LLC. The Company is a restaurant company and Burger King franchisee in the United States. As of January 1, 2017, the Company had owned and operated 753 Burger King restaurants under the name Burger King in 16 Northeastern, Midwestern and Southeastern states. Burger King restaurants feature the flame-broiled Whopper sandwich, as well as a range of hamburgers, chicken and other specialty sandwiches, French fries, salads, breakfast items, hot dogs, snacks, smoothies, frappes and other offerings. The Company’s Burger King restaurants are located in various states, such as Illinois, Indiana, Kentucky, Maine, Massachusetts, Michigan, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Vermont, Virginia and West Virginia.
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