Head-To-Head Survey: Sweetgreen (NYSE:SG) and Arcos Dorados (NYSE:ARCO)

Arcos Dorados (NYSE:ARCO) and Sweetgreen (NYSE:SG) are both mid-cap retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, risk, dividends, valuation and earnings.

Earnings and Valuation

This table compares Arcos Dorados and Sweetgreen’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arcos Dorados	$4.33 billion	0.48	$181.27 million	$0.81	12.16
Sweetgreen	$584.04 million	4.87	-$113.38 million	($0.93)	-27.00

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

Volatility and Risk

Arcos Dorados has a beta of 1.21, indicating that its share price is 21% more volatile than the S&P 500. Comparatively, Sweetgreen has a beta of 2.31, indicating that its share price is 131% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Arcos Dorados and Sweetgreen, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arcos Dorados	0	0	3	0	3.00
Sweetgreen	1	2	6	0	2.56

Arcos Dorados currently has a consensus target price of $13.83, indicating a potential upside of 40.44%. Sweetgreen has a consensus target price of $31.25, indicating a potential upside of 24.45%. Given Arcos Dorados’ stronger consensus rating and higher probable upside, analysts plainly believe Arcos Dorados is more favorable than Sweetgreen.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Arcos Dorados	3.90%	38.57%	6.13%
Sweetgreen	-17.15%	-20.74%	-11.75%

Institutional & Insider Ownership

55.9% of Arcos Dorados shares are owned by institutional investors. Comparatively, 95.8% of Sweetgreen shares are owned by institutional investors. 21.5% of Sweetgreen shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Arcos Dorados beats Sweetgreen on 9 of the 14 factors compared between the two stocks.

About Arcos Dorados

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, Curacao, Ecuador, French Guiana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, Trinidad and Tobago, Uruguay, the U.S. Virgin Islands of St. Croix and St. Thomas, and Venezuela. The company was founded in 2007 and is based in Montevideo, Uruguay.

About Sweetgreen

Sweetgreen, Inc., together with its subsidiaries, operates fast food restaurants serving healthy foods at scale in the United States. The company also accepts orders through its online and mobile ordering platforms, as well as sells gift cards that do not have an expiration date and can be redeemed. The company was founded in 2006 and is headquartered in Los Angeles, California.