Arcos Dorados (NYSE:ARCO) Reaches New 1-Year High - Time to Buy?

Key Points

• Arcos Dorados stock hit a new 52-week high of $9.00 in intra-day trading, but analysts hold a cautious view with a consensus rating of "Hold" and a target of $8.70 while Goldman Sachs has reissued a "Buy".
• The company missed quarterly EPS estimates ($0.12 reported vs. $0.20 expected) despite revenue rising 10.7% year-over-year to $1.27 billion, and trades at a P/E of 8.89 with a market cap of $1.89 billion.
• Arcos Dorados pays a quarterly dividend of $0.07 (annualized $0.28) for a 3.1% dividend yield and a 23.8% payout ratio, and about 55.9% of the shares are held by institutional investors.

Arcos Dorados Holdings Inc. (NYSE:ARCO - Get Free Report)'s stock price reached a new 52-week high during mid-day trading on Friday . The stock traded as high as $9.00 and last traded at $8.9950, with a volume of 311539 shares changing hands. The stock had previously closed at $8.67.

Analyst Ratings Changes

Several research firms have issued reports on ARCO. The Goldman Sachs Group reissued a "buy" rating on shares of Arcos Dorados in a report on Wednesday, April 8th. Weiss Ratings reissued a "hold (c-)" rating on shares of Arcos Dorados in a report on Monday, December 29th. One equities research analyst has rated the stock with a Buy rating and three have assigned a Hold rating to the company's stock. According to MarketBeat.com, the stock has an average rating of "Hold" and a consensus target price of $8.70.

Arcos Dorados Stock Performance

The stock has a market cap of $1.89 billion, a P/E ratio of 8.89, a price-to-earnings-growth ratio of 3.07 and a beta of 0.48. The company has a quick ratio of 0.95, a current ratio of 1.03 and a debt-to-equity ratio of 1.46. The business has a 50 day moving average price of $8.32 and a two-hundred day moving average price of $7.70.

Arcos Dorados (NYSE:ARCO - Get Free Report) last released its quarterly earnings data on Thursday, March 19th. The restaurant operator reported $0.12 earnings per share for the quarter, missing analysts' consensus estimates of $0.20 by ($0.08). The business had revenue of $1.27 billion during the quarter, compared to the consensus estimate of $1.26 billion. Arcos Dorados had a return on equity of 8.12% and a net margin of 4.53%.The business's revenue was up 10.7% on a year-over-year basis. During the same period last year, the company earned $0.28 EPS. On average, sell-side analysts forecast that Arcos Dorados Holdings Inc. will post 0.63 earnings per share for the current fiscal year.

Arcos Dorados Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Tuesday, December 29th. Investors of record on Wednesday, December 23rd will be given a $0.07 dividend. This represents a $0.28 dividend on an annualized basis and a dividend yield of 3.1%. The ex-dividend date is Wednesday, December 23rd. Arcos Dorados's payout ratio is currently 23.76%.

Institutional Investors Weigh In On Arcos Dorados

Hedge funds have recently made changes to their positions in the company. Global Retirement Partners LLC lifted its position in shares of Arcos Dorados by 9,074.6% in the fourth quarter. Global Retirement Partners LLC now owns 5,780 shares of the restaurant operator's stock worth $42,000 after buying an additional 5,717 shares in the last quarter. Quarry LP purchased a new stake in shares of Arcos Dorados in the third quarter worth about $45,000. Aquatic Capital Management LLC purchased a new stake in shares of Arcos Dorados in the third quarter worth about $53,000. Truist Financial Corp purchased a new stake in shares of Arcos Dorados in the fourth quarter worth about $76,000. Finally, Tudor Investment Corp ET AL purchased a new stake in shares of Arcos Dorados in the third quarter worth about $73,000. 55.91% of the stock is currently owned by hedge funds and other institutional investors.

Arcos Dorados Company Profile

Arcos Dorados Holdings Inc is the largest independent McDonald's franchisee in the world, operating under an exclusive license agreement with McDonald's Corporation. The company develops, owns and operates quick-service restaurants, offering the full McDonald's menu, including hamburgers, chicken sandwiches, salads, sides, desserts and McCafé beverages. In addition to restaurant operations, Arcos Dorados manages supply chain logistics, property development, training and support services for its franchise network.

Headquartered in Montevideo, Uruguay, Arcos Dorados serves 20 markets across Latin America and the Caribbean, including Argentina, Brazil, Chile, Colombia, Mexico, Puerto Rico and Uruguay.

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