ARCO vs. CAT

Last updated Jun 4, 2026

ARCO (Arcos Dorados Holdings Inc.) and CAT (Caterpillar Inc.) are both stocks. ARCO operates in Restaurants (Consumer Cyclical), while CAT operates in Farm & Heavy Construction Machinery (Industrials). Over the past 10 years, ARCO returned 8.77%/yr vs 31.52%/yr for CAT. At a 0.29 correlation, their price movements are largely independent.

Performance

ARCO vs. CAT - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Arcos Dorados Holdings Inc. (ARCO) and Caterpillar Inc. (CAT). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, ARCO achieves a 14.48% return, which is significantly lower than CAT's 62.36% return. Over the past 10 years, ARCO has underperformed CAT with an annualized return of 8.77%, while CAT has yielded a comparatively higher 31.52% annualized return.

ARCO

• 1D: -4.91%
• 1M: -3.70%
• YTD: 14.48%
• 6M: 9.90%
• 1Y: 17.06%
• 3Y*: 0.79%
• 5Y*: 7.15%
• 10Y*: 8.77%

CAT

• 1D: 1.80%
• 1M: 5.88%
• YTD: 62.36%
• 6M: 57.25%
• 1Y: 167.95%
• 3Y*: 62.31%
• 5Y*: 32.93%
• 10Y*: 31.52%

*Multi-year figures are annualized to reflect compound growth (CAGR)

ARCO vs. CAT - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
ARCO Arcos Dorados Holdings Inc.	14.48%	4.14%	-41.05%	54.92%	46.32%	17.56%	-35.25%	4.09%	-22.62%	91.67%
CAT Caterpillar Inc.	62.36%	60.30%	24.66%	25.95%	18.60%	15.95%	26.97%	19.51%	-17.56%	75.03%

Correlation

The correlation between ARCO and CAT is 0.34, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.34
Correlation (3Y) Calculated over the trailing 3-year period	0.31
Correlation (5Y) Calculated over the trailing 5-year period	0.33
Correlation (10Y) Calculated over the trailing 10-year period	0.29
Correlation (All Time) Calculated using the full available price history since Apr 15, 2011	0.29

Fundamentals

Market Cap ARCO : $1.75B CAT : $431.41B
EPS ARCO : $1.11 CAT : $20.07
PE Ratio ARCO : 7.49 CAT : 46.14
PEG Ratio ARCO : 0.12 CAT : 3.05
PS Ratio ARCO : 0.36 CAT : 6.14
PB Ratio ARCO : 2.26 CAT : 23.12
Total Revenue (TTM) ARCO : $4.82B CAT : $70.76B
Gross Profit (TTM) ARCO : $588.03M CAT : $23.01B
EBITDA (TTM) ARCO : $593.43M CAT : $15.31B

Return for Risk

ARCO vs. CAT — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

ARCO

ARCO Risk / Return Rank: 56
ARCO Sharpe Ratio Rank: 57
ARCO Sortino Ratio Rank: 55
ARCO Omega Ratio Rank: 51
ARCO Calmar Ratio Rank: 61
ARCO Martin Ratio Rank: 59

CAT

CAT Risk / Return Rank: 98
CAT Sharpe Ratio Rank: 98
CAT Sortino Ratio Rank: 98
CAT Omega Ratio Rank: 97
CAT Calmar Ratio Rank: 98
CAT Martin Ratio Rank: 99

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

ARCO vs. CAT - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Arcos Dorados Holdings Inc. (ARCO) and Caterpillar Inc. (CAT). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

	ARCO	CAT	Difference
Sharpe ratio: Return per unit of total volatility	0.49	4.98	-4.49
Sortino ratio: Return per unit of downside risk	1.04	5.68	-4.64
Omega ratio: Gain probability vs. loss probability	1.12	1.72	-0.60
Calmar ratio: Return relative to maximum drawdown	0.95	12.18	-11.22
Martin ratio: Return relative to average drawdown	1.94	40.49	-38.55
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

ARCO vs. CAT - Sharpe Ratio Comparison

The current ARCO Sharpe Ratio is 0.49, which is lower than the CAT Sharpe Ratio of 4.98. The chart below compares the historical Sharpe Ratios of ARCO and CAT, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	ARCO	CAT	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	0.49	4.98	-4.49
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.20	1.08	-0.88
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.22	1.02	-0.81
Sharpe Ratio (All Time) Calculated using the full available price history	-0.10	0.35	-0.45

Drawdowns

ARCO vs. CAT - Drawdown Comparison

The maximum ARCO drawdown since its inception was -91.66%, which is greater than CAT's maximum drawdown of -73.43%. Use the drawdown chart below to compare losses from any high point for ARCO and CAT.

Drawdown Indicators

	ARCO	CAT	Difference
Max Drawdown Largest peak-to-trough decline	-91.66%	-73.43%	-18.23%
Max Drawdown (1Y) Largest decline over 1 year	-17.94%	-13.88%	-4.06%
Max Drawdown (3Y) Largest decline over 3 years	-47.87%	-34.05%	-13.82%
Max Drawdown (5Y) Largest decline over 5 years	-47.87%	-34.05%	-13.82%
Max Drawdown (10Y) Largest decline over 10 years	-70.58%	-43.36%	-27.22%
Current Drawdown Current decline from peak	-61.83%	-0.08%	-61.75%
Average Drawdown Average peak-to-trough decline	-65.52%	-19.74%	-45.78%
Ulcer Index Depth and duration of drawdowns from previous peaks	8.79%	4.17%	+4.62%

Volatility

ARCO vs. CAT - Volatility Comparison

Arcos Dorados Holdings Inc. (ARCO) has a higher volatility of 16.12% compared to Caterpillar Inc. (CAT) at 11.17%. This indicates that ARCO's price experiences larger fluctuations and is considered to be riskier than CAT based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	ARCO	CAT	Difference
Volatility (1M) Calculated over the trailing 1-month period	16.12%	11.17%	+4.95%
Volatility (6M) Calculated over the trailing 6-month period	27.40%	27.09%	+0.31%
Volatility (1Y) Calculated over the trailing 1-year period	35.19%	33.97%	+1.22%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	35.92%	30.62%	+5.30%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	40.90%	30.86%	+10.04%

Dividends

ARCO vs. CAT - Dividend Comparison

ARCO's dividend yield for the trailing twelve months is around 3.00%, more than CAT's 0.65% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
ARCO Arcos Dorados Holdings Inc.	3.00%	3.27%	3.30%	1.50%	1.79%	0.00%	2.17%	1.36%	1.27%	0.00%	0.00%	0.00%
CAT Caterpillar Inc.	0.65%	1.02%	1.49%	1.69%	1.93%	2.07%	2.26%	2.56%	2.58%	1.97%	3.32%	4.33%

Financials

ARCO vs. CAT - Profitability Comparison

The chart below illustrates the profitability comparison between Arcos Dorados Holdings Inc. and Caterpillar Inc. over time, highlighting three key metrics: Gross Profit Margin, Operating Margin, and Net Profit Margin.

ARCO - Gross Margin

Gross margin is calculated as gross profit divided by revenue. For the three months ending on Jun 2026, Arcos Dorados Holdings Inc. reported a gross profit of 133.63M and revenue of 1.22B. Therefore, the gross margin over that period was 11.0%.

CAT - Gross Margin

Gross margin is calculated as gross profit divided by revenue. For the three months ending on Jun 2026, Caterpillar Inc. reported a gross profit of 6.11B and revenue of 17.42B. Therefore, the gross margin over that period was 35.1%.

ARCO - Operating Margin

Operating margin is calculated as operating income divided by revenue. For the three months ending on Jun 2026, Arcos Dorados Holdings Inc. reported an operating income of 56.88M and revenue of 1.22B, resulting in an operating margin of 4.7%.

CAT - Operating Margin

Operating margin is calculated as operating income divided by revenue. For the three months ending on Jun 2026, Caterpillar Inc. reported an operating income of 3.09B and revenue of 17.42B, resulting in an operating margin of 17.7%.

ARCO - Net Margin

Net margin is calculated as net income divided by revenue. For the three months ending on Jun 2026, Arcos Dorados Holdings Inc. reported a net income of 36.14M and revenue of 1.22B, resulting in a net margin of 3.0%.

CAT - Net Margin

Net margin is calculated as net income divided by revenue. For the three months ending on Jun 2026, Caterpillar Inc. reported a net income of 2.55B and revenue of 17.42B, resulting in a net margin of 14.6%.

Frequently Asked Questions

Can I hold both ARCO and CAT in my portfolio?

ARCO and CAT have a correlation of 0.34, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, ARCO or CAT?

ARCO has higher volatility (16.12%) compared to CAT (11.17%). In terms of maximum drawdown, ARCO dropped -91.66% vs CAT's -73.43%.

Which has better risk-adjusted returns?

CAT currently has the higher Sharpe Ratio (4.98 vs 0.49), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.