Arcos Dorados (ARCO) and Country Syl Ckng Restaurant Chain (CCSC) Critical Review

Country Syl Ckng Restaurant Chain (NYSE: CCSC) and Arcos Dorados (NYSE:ARCO) are both small-cap quick service restaurants companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, dividends, valuation and analyst recommendations.

Analyst Recommendations

This is a summary of recent recommendations for Country Syl Ckng Restaurant Chain and Arcos Dorados, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Country Syl Ckng Restaurant Chain 0 0 0 0 N/A
Arcos Dorados 0 0 3 0 3.00

Arcos Dorados has a consensus price target of $10.87, indicating a potential upside of 16.22%. Given Arcos Dorados’ higher probable upside, analysts plainly believe Arcos Dorados is more favorable than Country Syl Ckng Restaurant Chain.

Profitability

This table compares Country Syl Ckng Restaurant Chain and Arcos Dorados’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Country Syl Ckng Restaurant Chain 3.68% 5.63% 4.72%
Arcos Dorados 2.51% 20.04% 5.19%

Volatility and Risk

Country Syl Ckng Restaurant Chain has a beta of 0.5, indicating that its share price is 50% less volatile than the S&P 500. Comparatively, Arcos Dorados has a beta of 2.04, indicating that its share price is 104% more volatile than the S&P 500.

Institutional & Insider Ownership

36.6% of Arcos Dorados shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Country Syl Ckng Restaurant Chain and Arcos Dorados’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Country Syl Ckng Restaurant Chain N/A N/A N/A $0.16 32.31
Arcos Dorados $2.93 billion 0.67 $78.81 million $0.38 24.61

Arcos Dorados has higher revenue and earnings than Country Syl Ckng Restaurant Chain. Arcos Dorados is trading at a lower price-to-earnings ratio than Country Syl Ckng Restaurant Chain, indicating that it is currently the more affordable of the two stocks.

Summary

Arcos Dorados beats Country Syl Ckng Restaurant Chain on 8 of the 10 factors compared between the two stocks.

Country Syl Ckng Restaurant Chain Company Profile

Country Style Cooking Restaurant Chain Co., Ltd. (CSC Cayman) is a quick service restaurant chain in China. The Company is engaged in serving Sichuan-style fast food over the counter in the People’s Republic of China. The Company’s restaurant chain has approximately 337 restaurants, including around 177 restaurants in Chongqing municipality and around 103 restaurants in Sichuan province. CSC Cayman’s staples include entrees, such as spicy sauteed pork, Taiwanese-style braised pork over rice, honey-roasted spicy chicken wings, mushroom chicken, shredded pepper steak, shredded quick-fried ginger duck and kung pao chicken, along with a range of appetizers, desserts and beverages. Each entree on its menu is prepared with pre-mixed sauce packages delivered from the Company’s central facility in Chongqing. Approximately 260 of the Company’s restaurants are operated under its CSC brand and around 74 of the restaurants were operated under its Mr. Rice brand.

Arcos Dorados 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.

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