Noodles & (NASDAQ:NDLS) vs. Arcos Dorados Holdings (ARCO) Financial Contrast

Arcos Dorados Holdings (NYSE: ARCO) and Noodles & (NASDAQ:NDLS) are both retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, institutional ownership, earnings, profitability and risk.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Arcos Dorados Holdings and Noodles &, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arcos Dorados Holdings 0 0 3 0 3.00
Noodles & 1 5 1 0 2.00

Arcos Dorados Holdings presently has a consensus target price of $9.53, suggesting a potential downside of 3.21%. Noodles & has a consensus target price of $4.93, suggesting a potential upside of 15.97%. Given Noodles &’s higher possible upside, analysts plainly believe Noodles & is more favorable than Arcos Dorados Holdings.

Profitability

This table compares Arcos Dorados Holdings and Noodles &’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Arcos Dorados Holdings 1.76% 14.68% 3.69%
Noodles & -17.42% -10.25% -2.10%

Institutional and Insider Ownership

36.7% of Arcos Dorados Holdings shares are held by institutional investors. Comparatively, 65.7% of Noodles & shares are held by institutional investors. 52.7% of Noodles & shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Arcos Dorados Holdings has a beta of 2.16, indicating that its stock price is 116% more volatile than the S&P 500. Comparatively, Noodles & has a beta of -0.57, indicating that its stock price is 157% less volatile than the S&P 500.

Valuation and Earnings

This table compares Arcos Dorados Holdings and Noodles &’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Arcos Dorados Holdings $3.16 billion 0.66 $249.87 million $0.26 37.88
Noodles & $481.59 million 0.36 $12.41 million ($3.19) -1.33

Arcos Dorados Holdings has higher revenue and earnings than Noodles &. Noodles & is trading at a lower price-to-earnings ratio than Arcos Dorados Holdings, indicating that it is currently the more affordable of the two stocks.

Summary

Arcos Dorados Holdings beats Noodles & on 10 of the 13 factors compared between the two stocks.

Arcos Dorados Holdings 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.

Noodles & Company Profile

Noodles & Company develops and operates fast casual restaurants. The Company’s menu includes a range of cooked-to-order dishes, including noodles and pasta, soups, salads, sandwiches and appetizers. The Company has approximately 490 restaurants, including 420 Company-owned and 70 franchised locations, across 40 states, the District of Columbia and one Canadian province. The Company offers over 30 globally inspired Asian, Mediterranean and American dishes together on a single menu. The Company offers approximately 10 fresh vegetables and six proteins, including marinated steak, naturally raised pork, chicken, meatballs, shrimp and organic tofu. The Company offers Kids Meals, which includes sides, such as broccoli, carrots, fruit, applesauce and a portion of its housemade rice crispy treat. The Company’s restaurants’ locations include Arizona, California, Colorado, Delaware, New York, North Dakota, Ohio, Texas, Utah, Virginia, Washington and Wisconsin.

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