Analyzing CAVA Group (NYSE:CAVA) & Arcos Dorados (NYSE:ARCO)

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

Profitability

This table compares CAVA Group and Arcos Dorados’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CAVA Group	5.04%	7.37%	4.25%
Arcos Dorados	3.80%	36.55%	5.97%

Institutional and Insider Ownership

73.2% of CAVA Group shares are held by institutional investors. Comparatively, 55.9% of Arcos Dorados shares are held by institutional investors. 12.1% of CAVA Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares CAVA Group and Arcos Dorados”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CAVA Group	$845.22 million	18.71	$13.28 million	$0.41	338.17
Arcos Dorados	$4.49 billion	0.43	$181.27 million	$0.81	11.22

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

Risk and Volatility

CAVA Group has a beta of 3.33, meaning that its share price is 233% more volatile than the S&P 500. Comparatively, Arcos Dorados has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for CAVA Group and Arcos Dorados, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CAVA Group	0	8	8	0	2.50
Arcos Dorados	0	0	2	0	3.00

CAVA Group presently has a consensus price target of $116.93, suggesting a potential downside of 15.67%. Arcos Dorados has a consensus price target of $13.50, suggesting a potential upside of 48.51%. Given Arcos Dorados’ stronger consensus rating and higher possible upside, analysts plainly believe Arcos Dorados is more favorable than CAVA Group.

About CAVA Group

CAVA Group, Inc. owns and operates a chain of restaurants under the CAVA brand in the United States. The company also offers dips, spreads, and dressings through grocery stores. In addition, the company provides online and mobile ordering platforms. Cava Group, Inc. was founded in 2006 and is headquartered in Washington, the District of Columbia.

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.