Arcos Dorados Holdings Inc's Dividend Analysis
Delving into the Dividend Details of Arcos Dorados Holdings Inc (NYSE:ARCO)
Arcos Dorados Holdings Inc(NYSE:ARCO) recently announced a dividend of $0.04 per share, payable on 2023-12-27, with the ex-dividend date set for 2023-12-21. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Arcos Dorados Holdings Inc's dividend performance and assess its sustainability.
What Does Arcos Dorados Holdings Inc Do?
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Arcos Dorados Holdings Inc operates McDonald's-branded restaurants in approximately 20 countries and territories in Latin America and the Caribbean. It functions through two sources which include company-operated restaurants and franchised restaurants segment. Their menu includes hamburgers, McNuggets, salad, sandwiches, french fries and others.
A Glimpse at Arcos Dorados Holdings Inc's Dividend History
Arcos Dorados Holdings Inc has maintained a consistent dividend payment record since 2022. Dividends are currently distributed on a quarterly basis.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Arcos Dorados Holdings Inc's Dividend Yield and Growth
As of today, Arcos Dorados Holdings Inc currently has a 12-month trailing dividend yield of 1.47% and a 12-month forward dividend yield of 1.32%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, Arcos Dorados Holdings Inc's annual dividend growth rate was 11.90%. Based on Arcos Dorados Holdings Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Arcos Dorados Holdings Inc stock as of today is approximately 1.47%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Arcos Dorados Holdings Inc's dividend payout ratio is 0.21.
Arcos Dorados Holdings Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Arcos Dorados Holdings Inc's profitability 6 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported net profit in 7 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Arcos Dorados Holdings Inc's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Arcos Dorados Holdings Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Arcos Dorados Holdings Inc's revenue has increased by approximately 6.40% per year on average, a rate that outperforms approximately 69.11% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Arcos Dorados Holdings Inc's earnings increased by approximately 24.60% per year on average, a rate that outperforms approximately 72.53% of global competitors.
Concluding Thoughts on Arcos Dorados Holdings Inc's Dividend Outlook
In conclusion, Arcos Dorados Holdings Inc's dividend payments, growth rate, and payout ratio all point towards a company that values returning capital to shareholders while maintaining a balance for future growth. The company's fair profitability and growth metrics further reinforce the potential for sustained dividend payments. As value investors consider the stability and growth prospects of Arcos Dorados Holdings Inc, these financial health indicators serve as a guide to making informed investment decisions. Will Arcos Dorados Holdings Inc continue to serve up appetizing dividends in the years to come? Only time will tell, but the current analysis provides a solid foundation for expectations.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
