Arcos Dorados Holdings (ARCO) vs. Carrols Restaurant Group (TAST) Financial Analysis
Arcos Dorados Holdings (NYSE: ARCO) and Carrols Restaurant Group (NASDAQ:TAST) are both quick service restaurants companies, but which is the better business? We will compare the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, dividends, analyst recommendations and risk.
Risk & Volatility
Arcos Dorados Holdings has a beta of 2.07, indicating that its stock price is 107% more volatile than the S&P 500. Comparatively, Carrols Restaurant Group has a beta of 0.11, indicating that its stock price is 89% less volatile than the S&P 500.
Institutional and Insider Ownership
37.1% of Arcos Dorados Holdings shares are held by institutional investors. Comparatively, 86.7% of Carrols Restaurant Group shares are held by institutional investors. 5.6% of Carrols Restaurant Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This is a breakdown of current ratings and target prices for Arcos Dorados Holdings and Carrols Restaurant Group, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Arcos Dorados Holdings||0||0||2||0||3.00|
|Carrols Restaurant Group||0||0||2||0||3.00|
Arcos Dorados Holdings presently has a consensus target price of $10.30, indicating a potential upside of 0.49%. Carrols Restaurant Group has a consensus target price of $15.50, indicating a potential upside of 41.55%. Given Carrols Restaurant Group’s higher possible 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%|
Valuation & Earnings
This table compares Arcos Dorados Holdings and Carrols Restaurant Group’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Arcos Dorados Holdings||$2.93 billion||0.74||$78.81 million||$0.26||39.42|
|Carrols Restaurant Group||$943.58 million||0.42||$45.47 million||$0.72||15.21|
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.
Arcos Dorados Holdings Company Profile
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.
Carrols Restaurant Group Company Profile
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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