Head-To-Head Analysis: Herc (NYSE:HRI) and Aggreko (OTCMKTS:ARGKF)

Herc (NYSE:HRI) and Aggreko (OTCMKTS:ARGKF) are both mid-cap industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, analyst recommendations, earnings and profitability.

Risk and Volatility

Herc has a beta of 1.87, meaning that its stock price is 87% more volatile than the S&P 500. Comparatively, Aggreko has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500.

Valuation and Earnings

This table compares Herc and Aggreko”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Herc	$4.38 billion	1.19	$1.00 million	$1.47	105.73
Aggreko	$1.75 billion	1.74	-$142.52 million	$0.28	42.54

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

Analyst Ratings

This is a summary of recent ratings for Herc and Aggreko, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Herc	0	4	5	0	2.56
Aggreko	0	0	0	0	0.00

Herc currently has a consensus target price of $183.00, suggesting a potential upside of 17.74%. Given Herc’s stronger consensus rating and higher possible upside, analysts plainly believe Herc is more favorable than Aggreko.

Profitability

This table compares Herc and Aggreko’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Herc	1.01%	10.33%	1.44%
Aggreko	N/A	N/A	N/A

Insider and Institutional Ownership

93.1% of Herc shares are owned by institutional investors. 2.2% of Herc shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Herc beats Aggreko on 13 of the 14 factors compared between the two stocks.

About Herc

Herc Holdings Inc., together with its subsidiaries, operates as an equipment rental supplier. It rents aerial, earthmoving, material handling, trucks and trailers, air compressors, compaction, and lighting equipment, as well as generators, and safety supplies and expendables; and provides ProSolutions, an industry specific solution based services, such as pumping solutions, power generation, climate control, remediation and restoration, and studio and production equipment. The company also sells used equipment and contractor supplies, such as construction consumables, tools, small equipment, and safety supplies; provides repair, maintenance, equipment management, and safety training services, as well as offers ancillary services, such as equipment transport, rental protection, cleaning, refueling, and labor. It serves non-residential and residential construction, specialty trade, restoration, remediation and environment, and facility maintenance contractors; industrial manufacturing industries, including automotive and aerospace, power, metals and mining, agriculture, pulp, paper and wood, food and beverage, and refineries and petrochemical industries; infrastructure and government sectors; and commercial and retail service, hospitality, healthcare, recreation, entertainment production, and special event management customers through its sales team, industry catalogs, as well as through participation and sponsorship of industry events, trade shows, and Internet. As of December 31, 2017, it operated approximately 275 locations in the United States, Canada, China, the United Kingdom, Saudi Arabia, and Qatar. Herc Holdings Inc. is based in Bonita Springs, Florida.

About Aggreko

Aggreko Plc engages in the provision of mobile modular power, temperature control and energy services. It operates through the following segments: Rental Solutions, Power Solutions and Power Solutions Utility. The Rental Solutions segment refers to the transactional business serving a range of sectors in developed markets by providing power, heating, and cooling to a number of customer types who need it quickly and typically for a short period of time. The Power Solutions segment operates in emerging markets which serve both industrial and utility customers with power requirements. The Power Solutions Utility segment delivers longer-term projects providing power to national utility customers. The company was founded in 1962 and is headquartered in Glasgow, the United Kingdom.