#6 - Arcos Dorados (NYSE:ARCO)
If you’re a fan of the McDonald’s Corp. (NYSE: MCD) business model, Arcos Dorados Holdings Inc. (NYSE: ARCO) may hold some appeal. The company operates or franchises over 2,100 McDonald ’s-branded restaurants in Brazil, the Caribbean, and two divisions in Latin America: the North American Latin America division (NOLAD) and the South Latin America division (SLAD).
ARCO stock struggled much more than MCD stock in 2024 which highlights the impact that currency fluctuations add to higher producer prices. However, that weakness is showing up in earnings, but comparable-store revenue continues to increase year-over-year (YOY) above inflation rates.
A key reason for that growth is the company’s investment in delivery and drive-through sales. This is much like what’s been happening with McDonald’s in the United States, but Arcos Dorados isn’t seeing the same kind of growth. That could set the stage for a larger run in ARCO stock. And while investors wait, they can collect a dividend that offers a 2.84% yield.
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.
More- Current Price
- $8.39
- Consensus Rating
- Buy
- Ratings Breakdown
- 1 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $12.00 (43.1% Upside)
