Analyzing Arcos Dorados (NYSE:ARCO) & Arc Group (OTCMKTS:RLLY)

Arc Group (OTCMKTS:RLLY) and Arcos Dorados (NYSE:ARCO) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, analyst recommendations, valuation and dividends.

Analyst Recommendations

This is a summary of current ratings for Arc Group and Arcos Dorados, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arc Group	0	0	0	0	0.00
Arcos Dorados	2	1	0	0	1.33

Arcos Dorados has a consensus price target of $8.80, indicating a potential upside of 22.31%. Given Arcos Dorados’ stronger consensus rating and higher possible upside, analysts clearly believe Arcos Dorados is more favorable than Arc Group.

Earnings and Valuation

This table compares Arc Group and Arcos Dorados”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arc Group	N/A	N/A	N/A	N/A	N/A
Arcos Dorados	$4.47 billion	0.34	$148.76 million	$0.63	11.42

Arcos Dorados has higher revenue and earnings than Arc Group.

Profitability

This table compares Arc Group and Arcos Dorados’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arc Group	N/A	N/A	N/A
Arcos Dorados	2.89%	24.54%	4.10%

Institutional and Insider Ownership

55.9% of Arcos Dorados shares are held by institutional investors. 12.4% of Arc Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Arcos Dorados beats Arc Group on 7 of the 8 factors compared between the two stocks.

About Arc Group

ARC Group, Inc. engages in the operation of Dick’s Wings brand of restaurants. It offers its traditional and boneless chicken wings, hog wings, and duck wings spun in its signature sauces and seasonings. The firm oprates through the following segments; Company-Owned Restaurants and Franchise Operations. The Company-Owned Restaurants are casual dining restaurants. The Franchise Operations segment offers franchises for the Dick’s Wings brand. It also offers craft beers under the name Dick’s Craft Beers. The company was founded in April 2000 and is headquartered in Jacksonville, FL.

About Arcos Dorados

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, Curacao, Ecuador, French Guiana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, Trinidad and Tobago, Uruguay, the U.S. Virgin Islands of St. Croix and St. Thomas, and Venezuela. The company was founded in 2007 and is based in Montevideo, Uruguay.