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Herc Holdings Inc. (HRI) vs McGrath RentCorp (MGRC)

Herc Holdings Inc. and McGrath RentCorp are both Rental & Leasing Services companies. Herc Holdings Inc. is the larger, with a market value of $5.0B against $3.1B — 1.6× the size. McGrath RentCorp trades at the lower P/E: 19.6× against 40.8×. Herc Holdings Inc. grew revenue faster over the last twelve months: 19.4% against 2.13%. McGrath RentCorp has the higher net margin (16.8% vs 2.50%) and the higher return on invested capital (12.0% vs 4.21%). Both pay a dividend; Herc Holdings Inc. yields more (1.86% vs 1.54%). Across the 23 metrics below, McGrath RentCorp leads on 12 and Herc Holdings Inc. on 11.

Valuation

Metric HRI MGRC Rental & Leasing Services median
P/E 40.81 19.64 20.11
P/S 1.02 3.28 1.11
P/B 2.53 2.44 2.44
Price to free cash flow 16.79 112.64 11.04
EV/EBITDA 6.65 8.70 8.70
EV/Sales 2.66 3.28 2.87
Earnings yield 2.45% 5.09% 3.40%
Free cash flow yield 5.95% 0.89% 0.63%

Profitability

Metric HRI MGRC Rental & Leasing Services median
Gross margin 52.64% 48.81% 48.46%
Operating margin 13.75% 25.74% 8.37%
Net margin 2.50% 16.75% 1.97%
Free cash flow margin 6.08% 2.91% 2.91%
Return on equity 6.29% 12.88% 12.31%
Return on assets 0.88% 6.47% 0.88%
Return on invested capital 4.21% 11.98% 2.86%

Growth

Metric HRI MGRC Rental & Leasing Services median
Revenue growth (TTM) 19.38% 2.13% 4.47%
EPS growth (last fiscal year) (99.59%) (32.66%) 1.04%
Revenue growth, 5-year CAGR 19.69% 10.52% 11.45%
Net income growth, 5-year CAGR (57.68%) 8.92% 0.00%

Health

Metric HRI MGRC Rental & Leasing Services median
Debt to equity 4.10 0.00 1.28
Current ratio 1.08 0.25 1.01
Net debt to EBITDA 4.61 0.00 4.19

Dividend

Metric HRI MGRC Rental & Leasing Services median
Dividend yield 1.86% 1.54% 1.38%
Payout ratio 0.76 0.30 0.24

Size

Metric HRI MGRC Rental & Leasing Services median
Market cap 5.01b 3.11b 3.37b

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