Head-To-Head Contrast: Herc (NYSE:HRI) and United Rentals (NYSE:URI)

United Rentals (NYSE:URI) and Herc (NYSE:HRI) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, institutional ownership, profitability and risk.

Dividends

United Rentals pays an annual dividend of $7.88 per share and has a dividend yield of 0.8%. Herc pays an annual dividend of $2.80 per share and has a dividend yield of 1.9%. United Rentals pays out 18.9% of its earnings in the form of a dividend. Herc pays out 190.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. United Rentals has increased its dividend for 3 consecutive years and Herc has increased its dividend for 2 consecutive years.

Institutional and Insider Ownership

96.3% of United Rentals shares are held by institutional investors. Comparatively, 93.1% of Herc shares are held by institutional investors. 0.5% of United Rentals shares are held by insiders. Comparatively, 2.2% of Herc shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares United Rentals and Herc”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Rentals	$16.10 billion	3.93	$2.49 billion	$41.64	24.39
Herc	$4.86 billion	1.01	$1.00 million	$1.47	99.98

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for United Rentals and Herc, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Rentals	1	0	16	1	2.94
Herc	0	4	5	0	2.56

United Rentals presently has a consensus price target of $1,246.19, suggesting a potential upside of 22.72%. Herc has a consensus price target of $183.00, suggesting a potential upside of 24.51%. Given Herc’s higher possible upside, analysts plainly believe Herc is more favorable than United Rentals.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
United Rentals	15.67%	31.72%	9.47%
Herc	1.01%	10.33%	1.44%

Risk and Volatility

United Rentals has a beta of 1.79, suggesting that its share price is 79% more volatile than the S&P 500. Comparatively, Herc has a beta of 1.86, suggesting that its share price is 86% more volatile than the S&P 500.

Summary

United Rentals beats Herc on 13 of the 18 factors compared between the two stocks.

About United Rentals

United Rentals, Inc., through its subsidiaries, operates as an equipment rental company. It operates in two segments, General Rentals and Specialty. The General Rentals segment rents general construction and industrial equipment includes backhoes, skid-steer loaders, forklifts, earthmoving equipment, and material handling equipment; aerial work platforms, such as boom and scissor lifts; and general tools and light equipment comprising pressure washers, water pumps, and power tools for construction and industrial companies, manufacturers, utilities, municipalities, homeowners, and government entities. The specialty segment rents specialty construction products, including trench safety equipment consists of trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers, and line testing equipment for underground work; power and heating, ventilating, and air conditioning equipment, such as portable diesel generators, electrical distribution equipment, and temperature control equipment; fluid solutions equipment for fluid containment, transfer, and treatment; and mobile storage equipment and modular office space. This segment serves construction companies involved in infrastructure projects, and municipalities and industrial companies. It also sells aerial lifts, reach forklifts, telehandlers, compressors, and generators; construction consumables, tools, small equipment, and safety supplies; and parts for equipment that is owned by its customers, as well as provides repair and maintenance services. The company sells used equipment through its sales force, brokers, website, at auctions, and directly to manufacturers. The company operates in the United States, Canada, Europe, Australia, and New Zealand. United Rentals, Inc. was incorporated in 1997 and is headquartered in Stamford, Connecticut.

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.