Arcos Dorados (NYSE:ARCO – Get Free Report) and Full House Resorts (NASDAQ:FLL – Get Free Report) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.
Institutional & Insider Ownership
55.9% of Arcos Dorados shares are owned by institutional investors. Comparatively, 37.7% of Full House Resorts shares are owned by institutional investors. 10.6% of Full House Resorts shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Analyst Recommendations
This is a summary of recent recommendations and price targets for Arcos Dorados and Full House Resorts, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Arcos Dorados | 0 | 2 | 3 | 1 | 2.83 |
| Full House Resorts | 1 | 1 | 3 | 0 | 2.40 |
Arcos Dorados presently has a consensus target price of $9.75, suggesting a potential upside of 37.81%. Full House Resorts has a consensus target price of $3.00, suggesting a potential upside of 383.87%. Given Full House Resorts’ higher possible upside, analysts plainly believe Full House Resorts is more favorable than Arcos Dorados.
Valuation and Earnings
This table compares Arcos Dorados and Full House Resorts”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Arcos Dorados | $4.98 billion | 0.30 | $212.12 million | $1.22 | 5.80 |
| Full House Resorts | $305.86 million | 0.07 | -$40.20 million | ($1.02) | -0.61 |
Arcos Dorados has higher revenue and earnings than Full House Resorts. Full House Resorts 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 & Risk
Arcos Dorados has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500. Comparatively, Full House Resorts has a beta of 1.53, indicating that its share price is 53% more volatile than the S&P 500.
Profitability
This table compares Arcos Dorados and Full House Resorts’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Arcos Dorados | 5.15% | 12.50% | 2.58% |
| Full House Resorts | -12.06% | -473.31% | -5.78% |
Summary
Arcos Dorados beats Full House Resorts on 11 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 Full House Resorts
Full House Resorts, Inc. owns, leases, operates, develops, manages, and invests in casinos, and related hospitality and entertainment facilities in the United States. It operates through Midwest & South, West, and Contracted Sports Wagering segments. The company's properties include American Place in Waukegan, Illinois; Silver Slipper Casino and Hotel in Hancock County, Mississippi; Rising Star Casino Resort in Rising Sun, Indiana; Bronco Billy's Casino and Chamonix Casino Hotel in Cripple Creek, Colorado; Stockman's Casino in Fallon, Nevada; and Grand Lodge Casino, located within the Hyatt Regency Lake Tahoe Resort, Spa and Casino in Incline Village, Nevada. It also offers online sports wagering services. The company was incorporated in 1987 and is headquartered in Las Vegas, Nevada.
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