ARCO vs MCD

For growth investors, Arcos Dorados Holdings Inc.

(ARCO) is the stronger pick with 4. 7% revenue growth year-over-year, versus 1. 7% for McDonald's Corporation (MCD). Arcos Dorados Holdings Inc. (ARCO) offers the better valuation at 9. 0x trailing P/E (13. 1x 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.

On trailing P/E, Arcos Dorados Holdings Inc.

(ARCO) is the cheapest at 9. 0x versus McDonald's Corporation at 24. 9x. On forward P/E, Arcos Dorados Holdings Inc. is actually cheaper at 13. 1x.

Over the past 5 years, Arcos Dorados Holdings Inc.

(ARCO) delivered a total return of +66. 9%, compared to +34. 4% for McDonald's Corporation (MCD). Over 10 years, the gap is even starker: MCD returned +158. 5% versus ARCO's +124. 1%. 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), McDonald's Corporation (MCD) is the lower-risk stock at 0.

11β versus Arcos Dorados Holdings Inc. 's 0. 98β — meaning ARCO is approximately 777% more volatile than MCD relative to the S&P 500.

By revenue growth (latest reported year), Arcos Dorados Holdings Inc.

(ARCO) is pulling ahead at 4. 7% versus 1. 7% for McDonald's Corporation (MCD). On earnings-per-share growth, the picture is similar: Arcos Dorados Holdings Inc. grew EPS 42. 3% year-over-year, compared to -1. 5% for McDonald's Corporation. Over a 3-year CAGR, ARCO leads at 8. 9% 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.

McDonald's Corporation (MCD) is the more profitable company, earning 31.

7% net margin versus 4. 5% for Arcos Dorados Holdings Inc. — meaning it keeps 31. 7% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: MCD leads at 45. 2% versus 7. 5% for ARCO. At the gross margin level — before operating expenses — MCD leads at 56. 8%, 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.

On forward earnings alone, Arcos Dorados Holdings Inc.

(ARCO) trades at 13. 1x forward P/E versus 21. 5x for McDonald's Corporation — 8. 5x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for ARCO: 27. 5% to $11. 53.

All stocks in this comparison pay dividends.

Arcos Dorados Holdings Inc. (ARCO) offers the highest yield at 2. 7%, versus 2. 4% for McDonald's Corporation (MCD).

For long-horizon retirement investors, McDonald's Corporation (MCD) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.

11), 2. 4% yield, +158. 5% 10Y return). Both have compounded well over 10 years (MCD: +158. 5%, ARCO: +124. 1%), 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; MCD is a large-cap quality compounder 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.