ARCO vs FAT

For growth investors, FAT Brands Inc.

(FAT) is the stronger pick with 23. 4% revenue growth year-over-year, versus 4. 7% for Arcos Dorados Holdings Inc. (ARCO). Arcos Dorados Holdings Inc. (ARCO) offers the better valuation at 8. 9x trailing P/E (12. 9x forward), making it the more compelling value choice. Analysts rate Arcos Dorados Holdings Inc. (ARCO) a "Buy" — based on 12 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

Over the past 5 years, Arcos Dorados Holdings Inc.

(ARCO) delivered a total return of +58. 1%, compared to -8. 5% for FAT Brands Inc. (FAT). Over 10 years, the gap is even starker: ARCO returned +131. 8% versus FAT's -14. 2%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), Arcos Dorados Holdings Inc.

(ARCO) is the lower-risk stock at 1. 02β versus FAT Brands Inc. 's 1. 54β — meaning FAT is approximately 51% more volatile than ARCO relative to the S&P 500.

By revenue growth (latest reported year), FAT Brands Inc.

(FAT) is pulling ahead at 23. 4% versus 4. 7% for Arcos Dorados Holdings Inc. (ARCO). On earnings-per-share growth, the picture is similar: Arcos Dorados Holdings Inc. grew EPS 42. 3% year-over-year, compared to -98. 3% for FAT Brands Inc.. Over a 3-year CAGR, FAT leads at 70. 8% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

Arcos Dorados Holdings Inc.

(ARCO) is the more profitable company, earning 4. 5% net margin versus -32. 0% for FAT Brands Inc. — meaning it keeps 4. 5% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: ARCO leads at 7. 5% versus -8. 8% for FAT. At the gross margin level — before operating expenses — FAT leads at 25. 4%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

All stocks in this comparison pay dividends.

FAT Brands Inc. (FAT) offers the highest yield at 100. 0%, versus 2. 7% for Arcos Dorados Holdings Inc. (ARCO).

For long-horizon retirement investors, Arcos Dorados Holdings Inc.

(ARCO) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 1. 02), 2. 7% yield, +131. 8% 10Y return). FAT Brands Inc. (FAT) carries a higher beta of 1. 54 — meaning larger drawdowns in market downturns, which matters significantly when you cannot wait years for a recovery. Both have compounded well over 10 years (ARCO: +131. 8%, FAT: -14. 2%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Consumer Cyclical sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

In terms of investment character: ARCO is a small-cap deep-value stock; FAT is a small-cap high-growth stock. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.