Arcos Dorados (NASDAQ: HABT) and Habit Restaurants (NASDAQ:HABT) are both small-cap retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, analyst recommendations, valuation, risk and profitability.

Insider & Institutional Ownership

35.7% of Arcos Dorados shares are held by institutional investors. Comparatively, 59.6% of Habit Restaurants shares are held by institutional investors. 16.0% of Habit Restaurants shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Arcos Dorados and Habit Restaurants’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Arcos Dorados $3.32 billion 0.39 $129.16 million $0.61 10.00
Habit Restaurants $331.70 million 1.26 -$2.80 million $0.16 100.31

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

Analyst Recommendations

This is a breakdown of current recommendations for Arcos Dorados and Habit Restaurants, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arcos Dorados 0 0 1 0 3.00
Habit Restaurants 0 5 2 0 2.29

Arcos Dorados presently has a consensus price target of $12.00, suggesting a potential upside of 96.72%. Habit Restaurants has a consensus price target of $14.33, suggesting a potential downside of 10.70%. Given Arcos Dorados’ stronger consensus rating and higher probable upside, analysts plainly believe Arcos Dorados is more favorable than Habit Restaurants.

Risk & Volatility

Arcos Dorados has a beta of 1.68, indicating that its stock price is 68% more volatile than the S&P 500. Comparatively, Habit Restaurants has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500.

Profitability

This table compares Arcos Dorados and Habit Restaurants’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Arcos Dorados 2.82% 21.03% 5.69%
Habit Restaurants -0.84% 1.68% 0.79%

Dividends

Arcos Dorados pays an annual dividend of $0.10 per share and has a dividend yield of 1.6%. Habit Restaurants does not pay a dividend. Arcos Dorados pays out 16.4% of its earnings in the form of a dividend.

Summary

Arcos Dorados beats Habit Restaurants on 10 of the 16 factors compared between the two stocks.

Arcos Dorados Company Profile

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, Curaçao, Ecuador, French Guiana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, Trinidad and Tobago, Uruguay, the United States Virgin Islands of St. Croix and St. Thomas, and Venezuela. As of April 27, 2018, the company operated or franchised approximately 2,100 McDonald's-branded restaurants. Arcos Dorados Holdings Inc. was founded in 2007 and is based in Montevideo, Uruguay.

Habit Restaurants Company Profile

The Habit Restaurants, Inc., a holding company, operates and franchises fast casual restaurants under The Habit Burger Grill name. It specializes in offering made-to-order char-grilled burgers and sandwiches featuring choice tri-tip steak, grilled chicken, and sushi-grade tuna cooked over an open flame; and salads, as well as sides, shakes, and malts. As of February 28, 2018, the company had 215 restaurants in California, Arizona, Utah, New Jersey, Florida, Idaho, Virginia, Nevada, Washington, Maryland, and Pennsylvania as well as 3 international locations. The Habit Restaurants, Inc. was founded in 1969 and is headquartered in Irvine, California.

Receive News & Ratings for Arcos Dorados Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Arcos Dorados and related companies with MarketBeat.com's FREE daily email newsletter.