Arcos Dorados Holdings Inc (ARCO)vsYum! Brands Inc (YUM)
ARCO
Arcos Dorados Holdings Inc
$7.94
-0.87%
CONSUMER CYCLICAL · Cap: $1.70B
YUM
Yum! Brands Inc
$146.33
+3.88%
CONSUMER CYCLICAL · Cap: $40.80B
Smart Verdict
WallStSmart Research — data-driven comparison
Yum! Brands Inc generates 75% more annual revenue ($8.72B vs $4.98B). YUM leads profitability with a 25.4% profit margin vs 5.2%. ARCO appears more attractively valued with a PEG of 0.54. ARCO earns a higher WallStSmart Score of 72/100 (B).
ARCO
Strong Buy72
out of 100
Grade: B
YUM
Buy65
out of 100
Grade: C+
Intrinsic Value Comparison
Multi-model valuation · Graham Formula
Margin of Safety
+28.2%
Fair Value
$11.71
Current Price
$7.94
$3.77 discount
Margin of Safety
-78.4%
Fair Value
$89.16
Current Price
$146.33
$57.17 premium
Key Strengths & Concerns
Side-by-side fundamental analysis
Key Strengths
Attractively priced relative to earnings
Every $100 of equity generates 30 in profit
Earnings expanding 99.3% YoY
Growing faster than its price suggests
Reasonable price relative to book value
Strong operational efficiency at 32.8%
Earnings expanding 131.6% YoY
Conservative balance sheet, low leverage
Keeps 25 of every $100 in revenue as profit
Areas to Watch
Grey zone — moderate risk
Smaller company, higher risk/reward
5.2% margin — thin
Elevated debt levels
Expensive relative to growth rate
ROE of 0.0% — below average capital efficiency
Weak financial health signals
Distress zone — elevated risk
Comparative Analysis Report
WallStSmart ResearchBull Case : ARCO
The strongest argument for ARCO centers on P/E Ratio, Return on Equity, EPS Growth. Revenue growth of 14.3% demonstrates continued momentum. PEG of 0.54 suggests the stock is reasonably priced for its growth.
Bull Case : YUM
The strongest argument for YUM centers on Operating Margin, EPS Growth, Debt/Equity. Profitability is solid with margins at 25.4% and operating margin at 32.8%. Revenue growth of 12.2% demonstrates continued momentum.
Bear Case : ARCO
The primary concerns for ARCO are Altman Z-Score, Market Cap, Profit Margin. Debt-to-equity of 2.65 is elevated, increasing financial risk.
Bear Case : YUM
The primary concerns for YUM are PEG Ratio, Return on Equity, Piotroski F-Score.
Key Dynamics to Monitor
ARCO profiles as a value stock while YUM is a mature play — different risk/reward profiles.
YUM carries more volatility with a beta of 0.55 — expect wider price swings.
ARCO is growing revenue faster at 14.3% — sustainability is the question.
YUM generates stronger free cash flow (407M), providing more financial flexibility.
Bottom Line
ARCO scores higher overall (72/100 vs 65/100) and 14.3% revenue growth. Both earn "Strong Buy" and "Buy" ratings respectively — the choice depends on your investment horizon and risk tolerance.
This analysis is generated from publicly available financial data. Not financial advice.
Arcos Dorados Holdings Inc
CONSUMER CYCLICAL · RESTAURANTS · USA
Arcos Dorados Holdings Inc. is a McDonald's restaurant franchise. The company is headquartered in Montevideo, Uruguay.
Visit Website →Yum! Brands Inc
CONSUMER CYCLICAL · RESTAURANTS · USA
Yum! Brands, Inc. is an American fast food corporation listed on the Fortune 1000. Yum! operates the brands KFC, Pizza Hut, Taco Bell, The Habit Burger Grill, and WingStreet worldwide, except in China, where the brands are operated by a separate company, Yum China.
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