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Arcos Dorados Holdings

NYSE:ARCO
Snowflake Description

Reasonable growth potential unattractive dividend payer.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
ARCO
NYSE
$2B
Market Cap
  1. Home
  2. US
  3. Consumer Services
Company description

Arcos Dorados Holdings Inc. operates as a franchisee of McDonald’s restaurants. The last earnings update was 64 days ago. More info.


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  • Arcos Dorados Holdings has significant price volatility in the past 3 months.
ARCO Share Price and Events
7 Day Returns
1.1%
NYSE:ARCO
1.9%
US Hospitality
0.6%
US Market
1 Year Returns
13.8%
NYSE:ARCO
-3.5%
US Hospitality
4.1%
US Market
ARCO Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Arcos Dorados Holdings (ARCO) 1.1% 15.1% 15.6% 13.8% 38.3% -17.2%
US Hospitality 1.9% 3.8% -0.6% -3.5% 46.7% 25.2%
US Market 0.6% 3.8% 2.8% 4.1% 37.3% 42.5%
1 Year Return vs Industry and Market
  • ARCO outperformed the Hospitality industry which returned -3.5% over the past year.
  • ARCO outperformed the Market in United States of America which returned 4.1% over the past year.
Price Volatility
ARCO
Industry
5yr Volatility vs Market
Related Companies

Value

 Is Arcos Dorados Holdings undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Arcos Dorados Holdings to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Arcos Dorados Holdings.

NYSE:ARCO Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 4 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 11%
Perpetual Growth Rate 10-Year US Government Bond Rate 2.7%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NYSE:ARCO
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 2.7%
Equity Risk Premium S&P Global 6%
Hospitality Unlevered Beta Simply Wall St/ S&P Global 0.93
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.928 (1 + (1- 25%) (92.33%))
1.383
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.38
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.73% + (1.383 * 5.96%)
10.97%

Discounted Cash Flow Calculation for NYSE:ARCO using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Arcos Dorados Holdings is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

NYSE:ARCO DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (USD, Millions) Source Present Value
Discounted (@ 10.97%)
2020 30.50 Analyst x2 27.48
2021 54.00 Analyst x2 43.85
2022 65.00 Analyst x1 47.56
2023 64.00 Analyst x1 42.20
2024 63.83 Est @ -0.27% 37.93
2025 64.23 Est @ 0.63% 34.40
2026 65.04 Est @ 1.26% 31.39
2027 66.15 Est @ 1.7% 28.76
2028 67.48 Est @ 2.01% 26.44
2029 68.98 Est @ 2.23% 24.36
Present value of next 10 years cash flows $344.38
NYSE:ARCO DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2029 × (1 + g) ÷ (Discount Rate – g)
= $68.98 × (1 + 2.73%) ÷ (10.97% – 2.73%)
$859.91
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= $859.91 ÷ (1 + 10.97%)10
$303.64
NYSE:ARCO Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= $344.38 + $303.64
$648.02
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $648.02 / 203.61
$3.18
NYSE:ARCO Discount to Share Price
Calculation Result
Value per share (USD) From above. $3.18
Current discount Discount to share price of $8.02
= -1 x ($8.02 - $3.18) / $3.18
-152%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

  • The current share price of Arcos Dorados Holdings is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Arcos Dorados Holdings's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Arcos Dorados Holdings's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NYSE:ARCO PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-03-31) in USD $0.23
NYSE:ARCO Share Price ** NYSE (2019-07-17) in USD $8.02
United States of America Hospitality Industry PE Ratio Median Figure of 74 Publicly-Listed Hospitality Companies 22.66x
United States of America Market PE Ratio Median Figure of 3,082 Publicly-Listed Companies 17.98x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Arcos Dorados Holdings.

NYSE:ARCO PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NYSE:ARCO Share Price ÷ EPS (both in USD)

= 8.02 ÷ 0.23

34.3x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Arcos Dorados Holdings is overvalued based on earnings compared to the US Hospitality industry average.
  • Arcos Dorados Holdings is overvalued based on earnings compared to the United States of America market.
Price based on expected Growth
Does Arcos Dorados Holdings's expected growth come at a high price?
Raw Data
NYSE:ARCO PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 34.3x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 4 Analysts
17%per year
United States of America Hospitality Industry PEG Ratio Median Figure of 55 Publicly-Listed Hospitality Companies 1.98x
United States of America Market PEG Ratio Median Figure of 2,122 Publicly-Listed Companies 1.59x

*Line of best fit is calculated by linear regression .

NYSE:ARCO PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 34.3x ÷ 17%

2.01x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Arcos Dorados Holdings is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Arcos Dorados Holdings's assets?
Raw Data
NYSE:ARCO PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-03-31) in USD $1.79
NYSE:ARCO Share Price * NYSE (2019-07-17) in USD $8.02
United States of America Hospitality Industry PB Ratio Median Figure of 112 Publicly-Listed Hospitality Companies 2.24x
United States of America Market PB Ratio Median Figure of 5,241 Publicly-Listed Companies 1.81x
NYSE:ARCO PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NYSE:ARCO Share Price ÷ Book Value per Share (both in USD)

= 8.02 ÷ 1.79

4.47x

* Primary Listing of Arcos Dorados Holdings.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Arcos Dorados Holdings is overvalued based on assets compared to the US Hospitality industry average.
X
Value checks
We assess Arcos Dorados Holdings's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Hospitality industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Hospitality industry average (and greater than 0)? (1 check)
  5. Arcos Dorados Holdings has a total score of 0/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

 How is Arcos Dorados Holdings expected to perform in the next 1 to 3 years based on estimates from 4 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
17%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Arcos Dorados Holdings expected to grow at an attractive rate?
  • Arcos Dorados Holdings's earnings growth is expected to exceed the low risk savings rate of 2.7%.
Growth vs Market Checks
  • Arcos Dorados Holdings's earnings growth is expected to exceed the United States of America market average.
  • Arcos Dorados Holdings's revenue growth is expected to exceed the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NYSE:ARCO Future Growth Rates Data Sources
Data Point Source Value (per year)
NYSE:ARCO Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 4 Analysts 17%
NYSE:ARCO Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 4 Analysts 7.9%
United States of America Hospitality Industry Earnings Growth Rate Market Cap Weighted Average 16.8%
United States of America Hospitality Industry Revenue Growth Rate Market Cap Weighted Average 7.6%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 14.1%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7.4%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NYSE:ARCO Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 4 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NYSE:ARCO Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2023-12-31 4,194 123 1
2022-12-31 3,921 127 2
2021-12-31 3,540 259 113 3
2020-12-31 3,280 236 94 4
2019-12-31 3,028 173 74 3
NYSE:ARCO Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2019-03-31 2,963 234 48
2018-12-31 3,082 180 37
2018-09-30 3,225 192 97
2018-06-30 3,343 206 94
2018-03-31 3,388 234 89
2017-12-31 3,320 255 129
2017-09-30 3,230 252 81
2017-06-30 3,163 235 56
2017-03-31 3,052 179 103
2016-12-31 2,929 164 79
2016-09-30 2,886 129 63
2016-06-30 2,864 119 29

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Arcos Dorados Holdings's earnings are expected to grow by 17% yearly, however this is not considered high growth (20% yearly).
  • Arcos Dorados Holdings's revenue is expected to grow by 7.9% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NYSE:ARCO Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 4 Analyst Estimates (S&P Global) See Below

All data from Arcos Dorados Holdings Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:ARCO Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2023-12-31
2022-12-31
2021-12-31 0.53 0.60 0.45 2.00
2020-12-31 0.43 0.48 0.38 4.00
2019-12-31 0.37 0.43 0.29 4.00
NYSE:ARCO Past Financials Data
Date (Data in USD Millions) EPS *
2019-03-31 0.23
2018-12-31 0.18
2018-09-30 0.46
2018-06-30 0.45
2018-03-31 0.42
2017-12-31 0.61
2017-09-30 0.38
2017-06-30 0.26
2017-03-31 0.49
2016-12-31 0.37
2016-09-30 0.30
2016-06-30 0.14

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Arcos Dorados Holdings is expected to efficiently use shareholders’ funds in the future (Return on Equity greater than 20%).
X
Future performance checks
We assess Arcos Dorados Holdings's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Arcos Dorados Holdings has a total score of 4/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Arcos Dorados Holdings performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Arcos Dorados Holdings's growth in the last year to its industry (Hospitality).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Arcos Dorados Holdings has delivered over 20% year on year earnings growth in the past 5 years.
  • Arcos Dorados Holdings's 1-year earnings growth is negative, it can't be compared to the 5-year average.
  • Arcos Dorados Holdings's 1-year earnings growth is negative, it can't be compared to the US Hospitality industry average.
Earnings and Revenue History
Arcos Dorados Holdings's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Arcos Dorados Holdings Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:ARCO Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-03-31 2,962.68 48.49 224.03
2018-12-31 3,081.57 36.85 229.32
2018-09-30 3,225.11 96.88 235.79
2018-06-30 3,343.20 94.26 245.84
2018-03-31 3,387.93 89.08 247.41
2017-12-31 3,319.53 129.17 244.66
2017-09-30 3,229.80 81.05 239.21
2017-06-30 3,162.99 55.81 234.82
2017-03-31 3,051.60 103.35 227.19
2016-12-31 2,928.63 78.81 221.08
2016-09-30 2,886.46 63.21 233.01
2016-06-30 2,864.50 29.12 239.53
2016-03-31 2,936.20 -7.34 254.00
2015-12-31 3,052.74 -51.63 270.68
2015-09-30 3,201.38 -47.14 259.15
2015-06-30 3,351.71 -10.98 260.64
2015-03-31 3,510.63 -116.94 270.36
2014-12-31 3,651.07 -109.33 272.07
2014-09-30 3,783.44 -87.29 285.88
2014-06-30 3,900.63 -67.95 298.87
2014-03-31 3,971.89 39.83 304.59
2013-12-31 4,033.31 53.85 317.75
2013-09-30 3,996.98 65.99 325.69
2013-06-30 3,937.68 79.01 325.48
2013-03-31 3,852.71 82.34 317.32
2012-12-31 3,797.39 114.33 314.62
2012-09-30 3,746.22 116.33 304.57

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Arcos Dorados Holdings has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Arcos Dorados Holdings used its assets less efficiently than the US Hospitality industry average last year based on Return on Assets.
  • Arcos Dorados Holdings's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Arcos Dorados Holdings's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Hospitality industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Arcos Dorados Holdings has a total score of 1/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Arcos Dorados Holdings's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Arcos Dorados Holdings's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Arcos Dorados Holdings's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
  • Arcos Dorados Holdings's long term commitments exceed its cash and other short term assets.
Balance sheet
This treemap shows a more detailed breakdown of Arcos Dorados Holdings's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of physical assets or inventory.
  • Debt is not covered by short term assets, assets are 0.6x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Arcos Dorados Holdings Company Filings, last reported 3 months ago.

NYSE:ARCO Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2019-03-31 365.38 642.77 172.62
2018-12-31 392.76 644.50 197.28
2018-09-30 407.25 637.50 207.55
2018-06-30 397.30 641.05 218.94
2018-03-31 464.15 658.91 256.82
2017-12-31 496.14 656.53 328.08
2017-09-30 434.99 662.88 269.76
2017-06-30 412.07 654.43 237.80
2017-03-31 419.23 620.49 187.73
2016-12-31 351.58 610.17 194.80
2016-09-30 337.90 612.55 112.21
2016-06-30 337.96 686.78 136.79
2016-03-31 296.62 852.66 266.14
2015-12-31 286.89 657.19 112.52
2015-09-30 303.22 704.85 90.48
2015-06-30 384.24 763.51 83.18
2015-03-31 384.46 761.52 71.89
2014-12-31 457.59 802.72 139.03
2014-09-30 469.86 884.47 94.79
2014-06-30 521.81 889.13 101.03
2014-03-31 612.41 848.69 126.44
2013-12-31 695.30 784.12 175.65
2013-09-30 681.89 911.02 339.30
2013-06-30 668.65 690.10 130.15
2013-03-31 699.83 683.56 146.60
2012-12-31 746.31 657.57 186.58
2012-09-30 701.13 658.36 244.14
  • Arcos Dorados Holdings's level of debt (175.9%) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (138.9% vs 175.9% today).
  • Debt is well covered by operating cash flow (36.3%, greater than 20% of total debt).
  • Interest payments on debt are not well covered by earnings (EBIT is 3x annual interest expense, ideally 3x coverage).
X
Financial health checks
We assess Arcos Dorados Holdings's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Arcos Dorados Holdings has a total score of 1/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is Arcos Dorados Holdings's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
1.37%
Current annual income from Arcos Dorados Holdings dividends. Estimated to be 1.55% next year.
If you bought $2,000 of Arcos Dorados Holdings shares you are expected to receive $27 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Arcos Dorados Holdings's pays a lower dividend yield than the bottom 25% of dividend payers in United States of America (1.43%).
  • Arcos Dorados Holdings's dividend is below the markets top 25% of dividend payers in United States of America (3.72%).
Upcoming dividend payment

Purchase Arcos Dorados Holdings before the 'Buy Limit' to receive their next dividend payment.

Dividends are usually paid every 3 or 6 months, you can time your share purchase to take advantage of upcoming dividend payments.
Dividend payment calendar
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NYSE:ARCO Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 4 Analyst Estimates (S&P Global) See Below
United States of America Hospitality Industry Average Dividend Yield Market Cap Weighted Average of 47 Stocks 2.7%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 2017 Stocks 2.4%
United States of America Minimum Threshold Dividend Yield 10th Percentile 0.8%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.4%
United States of America Top 25% Dividend Yield 75th Percentile 3.7%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NYSE:ARCO Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2023-12-31 0.12 1.00
2022-12-31 0.12 1.00
2021-12-31 0.14 3.00
2020-12-31 0.12 4.00
2019-12-31 0.12 4.00
NYSE:ARCO Past Annualized Dividends Data
Date (Data in $) Dividend per share (annual) Avg. Yield (%)
2019-03-27 0.110 1.593
2018-11-14 0.100 1.223
2018-08-08 0.100 1.489
2018-05-09 0.100 1.382
2018-03-21 0.100 1.104
2016-11-02 0.000 0.000
2016-08-03 0.000 0.000
2016-05-04 0.000 0.000
2016-04-29 0.000 0.000
2016-03-16 0.000 0.000
2015-11-04 0.000 0.000
2015-08-11 0.000 0.000
2015-05-12 0.000 0.000
2015-03-17 0.238 4.204
2014-10-01 0.238 4.209
2014-06-24 0.238 2.961
2013-03-22 0.239 2.160
2012-12-07 0.239 1.825
2012-10-12 0.239 1.910
2012-07-05 0.239 1.698
2012-04-20 0.239 1.655
2011-12-15 0.239 1.208
2011-09-14 0.239 1.049
2011-06-06 0.239 1.033
2011-05-06 0.239 1.074
2011-05-05 0.239 1.070
2011-04-15 0.239 1.046

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Arcos Dorados Holdings has been paying a dividend for less than 10 years and during this time payments have been volatile (annual drop of over 20%).
  • Arcos Dorados Holdings has only been paying a dividend for 8 years, and since then dividends per share have fallen.
Current Payout to shareholders
What portion of Arcos Dorados Holdings's earnings are paid to the shareholders as a dividend.
  • Dividends paid are well covered by earnings (2.1x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be well covered by earnings (3.4x coverage).
X
Income/ dividend checks
We assess Arcos Dorados Holdings's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.8%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Arcos Dorados Holdings afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Arcos Dorados Holdings has a total score of 2/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of Arcos Dorados Holdings's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Marcelo Rabach
AGE 49
TENURE AS CEO 0 years
CEO Bio

Mr. Marcelo Rabach serves as Chief Executive Officer at Arcos Dorados Holdings, Inc. since July 1, 2019. He served as Chief Operating Officer of Arcos Dorados Holdings, Inc. since August 2015 until July 1, 2019. Mr. Rabach served as Divisional President of NOLAD at Arcos Dorados Holdings, Inc from 2013 to August 2015 and served as its Vice President of Operations Development since 2011. He served as Divisional President of Brazil from 2008 to 2011 at Arcos Dorados Holdings, Inc. He served as McDonald's Chief Operating Officer in Venezuela from 2005 to 2008. He began his career at McDonald's Argentina in 1990 as a crew member in the Alto Palermo restaurant in Buenos Aires, when Arcos Dorados only had 8 restaurants in Argentina and has over 17 years of line operations experience, starting as a crew employee and steadily advancing into larger operational roles. From 1999 to 2005, he was responsible for the operations, real estate, construction, human resources, local store marketing and training and franchising of a region within Argentina, holding the positions of Operations Manager and Operations Director. Mr. Rabach received his bachelor’s degree in Business Administration from Universidad Argentina de la Empresa in 2002 and completed an MBA from the IAE Business School, Buenos Aires, Argentina, in 2004.

CEO Compensation
  • Insufficient data for Marcelo to compare compensation growth.
  • Insufficient data for Marcelo to establish whether their remuneration is reasonable compared to companies of similar size in United States of America.
Management Team Tenure

Average tenure and age of the Arcos Dorados Holdings management team in years:

3.8
Average Tenure
50
Average Age
  • The tenure for the Arcos Dorados Holdings management team is about average.
Management Team

Woods Staton

TITLE
Executive Chairman
AGE
69

Marcelo Rabach

TITLE
Chief Executive Officer
AGE
49

Mariano Tannenbaum

TITLE
Chief Financial Officer
AGE
45
TENURE
2.4 yrs

Luis Raganato

TITLE
Chief Operating Officer
AGE
54

David Grinberg

TITLE
Vice President of Corporate Communications & Investor Relations
AGE
40
TENURE
1.5 yrs

Juan David Saldarriaga

TITLE
Chief Legal Counsel
AGE
51
TENURE
9 yrs

Santiago Blanco

TITLE
Chief Marketing and Digital Officer
AGE
49
TENURE
0.5 yrs

Diego Benenzon

TITLE
Vice President for Human Resources
AGE
52
TENURE
5.5 yrs

Alejandro Yapur

TITLE
Divisional President of SLAD
AGE
50
TENURE
6 yrs

Paulo Camargo

TITLE
Divisional President of Brazil
AGE
50
TENURE
3.8 yrs
Board of Directors Tenure

Average tenure and age of the Arcos Dorados Holdings board of directors in years:

8.2
Average Tenure
57
Average Age
  • The tenure for the Arcos Dorados Holdings board of directors is about average.
Board of Directors

Sergio Alonso

TITLE
Director
AGE
56

Woods Staton

TITLE
Executive Chairman
AGE
69
TENURE
12.5 yrs

Annette Franqui

TITLE
Director
AGE
57
TENURE
12.5 yrs

Carlos Hernández-Artigas

TITLE
Director
AGE
55
TENURE
12.5 yrs

Michael Chu

TITLE
Independent Director
AGE
71
TENURE
8.3 yrs

José Fernández

TITLE
Independent Director
AGE
57
TENURE
5.8 yrs

José Vélez Cadavid

TITLE
Independent Director
AGE
69
TENURE
8.1 yrs

Jorge Ricardo Gutiérrez Muñoz

TITLE
Independent Director
AGE
75
TENURE
3 yrs

Francisco Staton

TITLE
Director
AGE
38
TENURE
1.3 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month individual insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price ($) Value ($)
X
Management checks
We assess Arcos Dorados Holdings's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Arcos Dorados Holdings has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

Does Arcos Dorados Holdings Inc. (NYSE:ARCO) Have A Particularly Volatile Share Price?

See our latest analysis for Arcos Dorados Holdings What we can learn from ARCO's beta value As it happens, Arcos Dorados Holdings has a five year beta of 1.04. … With a market capitalisation of US$1.5b, Arcos Dorados Holdings is a small cap stock. … What this means for you: Since Arcos Dorados Holdings has a beta close to one, it will probably show a positive return when the market is moving up, based on history.

Simply Wall St -

Will Arcos Dorados Holdings Inc.'s (NYSE:ARCO) Earnings Grow In The Year Ahead?

Looking at Arcos Dorados Holdings Inc.'s (NYSE:ARCO) earnings update in March 2019, the consensus outlook from analysts appear fairly confident, with profits predicted to increase by 41% next year, though this is relatively lower than the historical 5-year average earnings growth of 53%. … Below is a brief commentary around Arcos Dorados Holdings's earnings outlook going forward, which may give you a sense of market sentiment for the company. … Check out our latest analysis for Arcos Dorados Holdings Can we expect Arcos Dorados Holdings to keep growing?

Simply Wall St -

Introducing Arcos Dorados Holdings (NYSE:ARCO), The Stock That Dropped 41% In The Last Five Years

Check out our latest analysis for Arcos Dorados Holdings In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. … Arcos Dorados Holdings became profitable within the last five years. … In the case of Arcos Dorados Holdings, it has a TSR of -38% for the last 5 years.

Simply Wall St -

At US$6.26, Is It Time To Put Arcos Dorados Holdings Inc. (NYSE:ARCO) On Your Watch List?

The stock’s ratio of 26.77x is currently trading slightly above its industry peers’ ratio of 23.14x, which means if you buy Arcos Dorados Holdings today, you’d be paying a relatively reasonable price for it. … And if you believe that Arcos Dorados Holdings should be trading at this level in the long run, there’s only an insignificant downside when the price falls to its real value. … Given that Arcos Dorados Holdings’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on.

Simply Wall St -

Should We Worry About Arcos Dorados Holdings Inc.'s (NYSE:ARCO) P/E Ratio?

We'll apply a basic P/E ratio analysis to Arcos Dorados Holdings Inc.'s (NYSE:ARCO), to help you decide if the stock is worth further research. … Based on the last twelve months, Arcos Dorados Holdings's P/E ratio is 39.79. … See our latest analysis for Arcos Dorados Holdings?

Simply Wall St -

Can Arcos Dorados Holdings Inc. (NYSE:ARCO) Improve Its Returns?

Our data shows Arcos Dorados Holdings has a return on equity of 9.4% for the last year. … One way to conceptualize this, is that for each $1 of shareholders' equity it has, the company made $0.094 in profit. … Return on Equity = Net Profit ÷ Shareholders' Equity

Simply Wall St -

Is Arcos Dorados Holdings Inc. (NYSE:ARCO) A Great Dividend Stock?

Historically, Arcos Dorados Holdings Inc. … Does Arcos Dorados Holdings tick all the boxes of a great dividend stock? … See our latest analysis for Arcos Dorados Holdings

Simply Wall St -

Did Business Growth Power Arcos Dorados Holdings's Share Price Gain of 195%?

It might seem bad, but the worst that can happen when you buy a stock (without leverage) is that its share price goes to zero. … (NYSE:ARCO) share price has soared 195% in the last three years. … By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Simply Wall St -

What Kind Of Investor Owns Most Of Arcos Dorados Holdings Inc. (NYSE:ARCO)?

Every investor in Arcos Dorados Holdings Inc. … Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. … Arcos Dorados Holdings has a market capitalization of US$1.8b, so we would expect some institutional investors to have noticed the stock.

Simply Wall St -

What Can We Learn From Arcos Dorados Holdings Inc.’s (NYSE:ARCO) Investment Returns?

In particular, we'll consider its Return On Capital Employed (ROCE), as that can give us insight into how profitably the company is able to employ capital in its business. … Return On Capital Employed (ROCE): What is it? … How Do You Calculate Return On Capital Employed?

Simply Wall St -

Company Info

Description

Arcos Dorados Holdings Inc. operates as a franchisee of McDonald’s restaurants. It has the exclusive right to own, operate, and grant franchises of McDonald’s restaurants in 20 countries and territories in Latin America and the Caribbean, including Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curaçao, Ecuador, French Guiana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, Trinidad and Tobago, Uruguay, the United States Virgin Islands of St. Croix and St. Thomas, and Venezuela. As of March 27, 2019, the company operated or franchised approximately 2,200 McDonald’s-branded restaurants in Latin America. Arcos Dorados Holdings Inc. was founded in 2007 and is based in Montevideo, Uruguay.

Details
Name: Arcos Dorados Holdings Inc.
ARCO
Exchange: NYSE
Founded: 2007
$1,632,944,171
203,608,999
Website: http://www.arcosdorados.com
Address: Arcos Dorados Holdings Inc.
Dr. Luis Bonavita 1294,
Office 501,
Montevideo,
11300,
Uruguay
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NYSE ARCO Class A Shares New York Stock Exchange US USD 14. Apr 2011
DB AD8 Class A Shares Deutsche Boerse AG DE EUR 14. Apr 2011
BMV ARCO N Class A Shares Bolsa Mexicana de Valores MX MXN 14. Apr 2011
BASE ARCO CEDEAR EACH 1 REP 2 COM CL 'A' USD0.00 Buenos Aires Stock Exchange AR ARS 22. Apr 2019
Number of employees
Current staff
Staff numbers
0
Arcos Dorados Holdings employees.
Industry
Restaurants
Consumer Services
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/07/18 00:40
End of day share price update: 2019/07/17 00:00
Last estimates confirmation: 2019/07/10
Last earnings filing: 2019/05/15
Last earnings reported: 2019/03/31
Last annual earnings reported: 2018/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.