Avis Budget Group, Inc. (CAR) vs McGrath RentCorp (MGRC)

Avis Budget Group, Inc. and McGrath RentCorp are both Rental & Leasing Services companies. Avis Budget Group, Inc. is the larger, with a market value of $4.3B against $3.1B — 1.4× the size. Avis Budget Group, Inc. has negative trailing earnings, so its P/E is not meaningful; McGrath RentCorp trades at 19.3×. McGrath RentCorp grew revenue faster over the last twelve months: 2.13% against −0.60%. McGrath RentCorp has the higher net margin (16.8% vs −6.98%) and the higher return on invested capital (12.0% vs −0.33%). Across the 20 metrics below, Avis Budget Group, Inc. leads on 11 and McGrath RentCorp on 9.

Valuation

Metric CAR MGRC Rental & Leasing Services median
P/E n/m 19.25 19.79
P/S 0.36 3.21 1.12
P/B n/m 2.39 2.56
Price to free cash flow 1.71 110.40 11.09
EV/EBITDA 5.92 8.53 8.53
EV/Sales 2.46 3.21 2.94
Earnings yield (19.10%) 5.19% 3.37%
Free cash flow yield 58.56% 0.91% 0.64%

Profitability

Metric CAR MGRC Rental & Leasing Services median
Gross margin 48.11% 48.81% 48.46%
Operating margin 7.10% 25.74% 8.37%
Net margin (6.98%) 16.75% 1.97%
Free cash flow margin 21.06% 2.91% 2.91%
Return on equity 29.16% 12.88% 12.88%
Return on assets (2.54%) 6.47% 0.88%
Return on invested capital (0.33%) 11.98% 2.86%

Growth

Metric CAR MGRC Rental & Leasing Services median
Revenue growth (TTM) (0.60%) 2.13% 4.47%
EPS growth (last fiscal year) 50.71% (32.66%) 1.04%
Revenue growth, 5-year CAGR 16.62% 10.52% 11.45%
Net income growth, 5-year CAGR 0.00% 8.92% 0.00%

Health

Metric CAR MGRC Rental & Leasing Services median
Debt to equity (7.80) 0.00 1.28
Current ratio 0.70 0.25 0.87
Net debt to EBITDA 5.37 0.00 4.19

Dividend

Metric CAR MGRC Rental & Leasing Services median
Dividend yield — 1.57% 1.40%
Payout ratio — 0.30 0.24

Size

Metric CAR MGRC Rental & Leasing Services median
Market cap 4.25b 3.11b 3.17b

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