Arcos Dorados Holdings Inc (ARCO)vsYum! Brands Inc (YUM)
ARCO
Arcos Dorados Holdings Inc
$8.37
+3.46%
CONSUMER CYCLICAL · Cap: $1.76B
YUM
Yum! Brands Inc
$159.16
-0.17%
CONSUMER CYCLICAL · Cap: $44.27B
Smart Verdict
WallStSmart Research — data-driven comparison
Yum! Brands Inc generates 76% more annual revenue ($8.21B vs $4.68B). YUM leads profitability with a 19.0% profit margin vs 4.5%. ARCO appears more attractively valued with a PEG of 0.54. ARCO earns a higher WallStSmart Score of 60/100 (C).
ARCO
Buy60
out of 100
Grade: C
YUM
Buy59
out of 100
Grade: C
Intrinsic Value Comparison
Multi-model valuation · Graham Formula
Margin of Safety
-22.4%
Fair Value
$6.87
Current Price
$8.37
$1.50 premium
Margin of Safety
+38.8%
Fair Value
$259.74
Current Price
$159.16
$100.58 discount
Key Strengths & Concerns
Side-by-side fundamental analysis
Key Strengths
Attractively priced relative to earnings
Every $100 of equity generates 33 in profit
Growing faster than its price suggests
Reasonable price relative to book value
Strong operational efficiency at 31.9%
Earnings expanding 27.7% YoY
Areas to Watch
Smaller company, higher risk/reward
4.5% margin — thin
Weak financial health signals
Earnings declined 56.9%
Expensive relative to growth rate
Moderate valuation
ROE of 0.0% — below average capital efficiency
Weak financial health signals
Comparative Analysis Report
WallStSmart ResearchBull Case : ARCO
The strongest argument for ARCO centers on P/E Ratio, Return on Equity, PEG Ratio. Revenue growth of 10.7% 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. Profitability is solid with margins at 19.0% and operating margin at 31.9%.
Bear Case : ARCO
The primary concerns for ARCO are Market Cap, Profit Margin, Piotroski F-Score. Debt-to-equity of 2.77 is elevated, increasing financial risk. Thin 4.5% margins leave little buffer for downturns.
Bear Case : YUM
The primary concerns for YUM are PEG Ratio, P/E Ratio, Return on Equity.
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 0.64 — expect wider price swings.
ARCO is growing revenue faster at 10.7% — sustainability is the question.
YUM generates stronger free cash flow (482M), providing more financial flexibility.
Bottom Line
ARCO scores higher overall (60/100 vs 59/100) and 10.7% revenue growth. YUM offers better value entry with a 38.8% margin of safety. Both earn "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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