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Avis Budget Group, Inc. (CAR) vs Herc Holdings Inc. (HRI)

Avis Budget Group, Inc. and Herc Holdings Inc. are both Rental & Leasing Services companies. Herc Holdings Inc. is the larger, with a market value of $5.0B against $4.3B — 1.2× the size. Avis Budget Group, Inc. has negative trailing earnings, so its P/E is not meaningful; Herc Holdings Inc. trades at 40.8×. Herc Holdings Inc. grew revenue faster over the last twelve months: 19.4% against −0.60%. Herc Holdings Inc. has the higher net margin (2.50% vs −6.98%) and the higher return on invested capital (4.21% vs 0.00%). Across the 20 metrics below, Avis Budget Group, Inc. leads on 10 and Herc Holdings Inc. on 10.

Valuation

Metric CAR HRI Rental & Leasing Services median
P/E n/m 40.81 20.11
P/S 0.36 1.02 1.11
P/B n/m 2.53 2.44
Price to free cash flow 1.73 16.79 11.04
EV/EBITDA 5.92 6.65 8.70
EV/Sales 2.54 2.66 2.87
Earnings yield (18.84%) 2.45% 3.40%
Free cash flow yield 57.77% 5.95% 0.63%

Profitability

Metric CAR HRI Rental & Leasing Services median
Gross margin 48.11% 52.64% 48.46%
Operating margin 7.10% 13.75% 8.37%
Net margin (6.98%) 2.50% 1.97%
Free cash flow margin 21.06% 6.08% 2.91%
Return on equity 29.16% 6.29% 12.31%
Return on assets (2.54%) 0.88% 0.88%
Return on invested capital 0.00% 4.21% 2.86%

Growth

Metric CAR HRI Rental & Leasing Services median
Revenue growth (TTM) (0.60%) 19.38% 4.47%
EPS growth (last fiscal year) 50.71% (99.59%) 1.04%
Revenue growth, 5-year CAGR 16.62% 19.69% 11.45%
Net income growth, 5-year CAGR 0.00% (57.68%) 0.00%

Health

Metric CAR HRI Rental & Leasing Services median
Debt to equity (0.12) 4.10 1.28
Current ratio 0.70 1.08 1.01
Net debt to EBITDA 5.37 4.61 4.19

Dividend

Metric CAR HRI Rental & Leasing Services median
Dividend yield — 1.86% 1.38%
Payout ratio — 0.76 0.24

Size

Metric CAR HRI Rental & Leasing Services median
Market cap 4.25b 5.01b 3.37b

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