Head to Head Analysis: SSP Group (OTCMKTS:SSPPF) versus Arcos Dorados (NYSE:ARCO)

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for SSP Group and Arcos Dorados, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SSP Group	0	2	1	0	2.33
Arcos Dorados	1	2	0	0	1.67

Arcos Dorados has a consensus price target of $8.70, suggesting a potential upside of 15.46%. Given Arcos Dorados’ higher possible upside, analysts plainly believe Arcos Dorados is more favorable than SSP Group.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SSP Group	N/A	N/A	N/A
Arcos Dorados	2.89%	24.54%	4.10%

Institutional and Insider Ownership

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

Valuation and Earnings

This table compares SSP 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
SSP Group	$4.35 billion	0.31	$34.75 million	N/A	N/A
Arcos Dorados	$4.56 billion	0.35	$148.76 million	$1.17	6.44

Arcos Dorados has higher revenue and earnings than SSP Group.

Volatility & Risk

SSP Group has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500. Comparatively, Arcos Dorados has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500.

Summary

Arcos Dorados beats SSP Group on 8 of the 11 factors compared between the two stocks.

About SSP Group

SSP Group plc operates food and beverage outlets in North America, Europe, the United Kingdom, Ireland, the Asia Pacific, Eastern Europe, the Middle East, and internationally. The company operates outlets at airports, railway stations, motorway service areas, hospitals, and shopping centers. It also operates sandwich shops, cafes, bars, and restaurants. SSP Group plc was founded in 1961 and is headquartered in London, the United Kingdom.

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.