At the current trading price of $13 per share, the total market capitalization is $2.72 billion. The market is valuing Arcos Dorados at 13.8x forward earnings, 4x book value. The company is paying investors a 1.8% dividend yield. McDonald’s is a much bigger corporation, with a $94.23 billion market cap. McDonald’s is valued at 14.7x forward P/E and 6.9x book value. It is paying a better dividend yield at 3%. Burger King, with $5.64 billion in market cap, is just a bit bigger than Arcos Dorados. At the current trading price of $16.15 per share, Burger King is valued at 19x forward earnings and 5.1x book value. Its dividend yield is the lowest of the three, at only 02%.
Foolish Bottom Line
Indeed, Arcos Dorados is a fast growing business of McDonald’s in Latin America. With a leadership position in the quick service restaurant market, significantly high insider ownership, and a reasonable valuation, Arcos Dorados could fit well in investors’ growth portfolios.
The article A Fast Growing McDonald’s in Latin America originally appeared on Fool.com and is written by Anh HOANG.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.