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McGrath RentCorp (MGRC) vs Vestis Corporation (VSTS)

McGrath RentCorp and Vestis Corporation are both Rental & Leasing Services companies. McGrath RentCorp is the larger, with a market value of $3.1B against $1.9B — 1.7× the size. Vestis Corporation has negative trailing earnings, so its P/E is not meaningful; McGrath RentCorp trades at 19.6×. McGrath RentCorp grew revenue faster over the last twelve months: 2.13% against −0.39%. McGrath RentCorp has the higher net margin (16.8% vs −0.20%) and the higher return on invested capital (12.0% vs 2.97%). Only McGrath RentCorp pays a dividend (1.54%). Across the 22 metrics below, McGrath RentCorp leads on 15 and Vestis Corporation on 7.

Valuation

Metric MGRC VSTS Rental & Leasing Services median
P/E 19.64 n/m 20.11
P/S 3.28 0.69 1.11
P/B 2.44 2.12 2.44
Price to free cash flow 112.64 12.93 11.04
EV/EBITDA 8.70 12.71 8.70
EV/Sales 3.28 1.13 2.87
Earnings yield 5.09% (0.36%) 3.40%
Free cash flow yield 0.89% 7.73% 0.63%

Profitability

Metric MGRC VSTS Rental & Leasing Services median
Gross margin 48.81% 26.30% 48.46%
Operating margin 25.74% 3.64% 8.37%
Net margin 16.75% (0.20%) 1.97%
Free cash flow margin 2.91% 5.33% 2.91%
Return on equity 12.88% (0.60%) 12.31%
Return on assets 6.47% (0.18%) 0.88%
Return on invested capital 11.98% 2.97% 2.86%

Growth

Metric MGRC VSTS Rental & Leasing Services median
Revenue growth (TTM) 2.13% (0.39%) 4.47%
EPS growth (last fiscal year) (32.66%) (293.75%) 1.04%
Revenue growth, 5-year CAGR 10.52% 1.31% 11.45%
Net income growth, 5-year CAGR 8.92% 0.00% 0.00%

Health

Metric MGRC VSTS Rental & Leasing Services median
Debt to equity 0.00 1.42 1.28
Current ratio 0.25 2.17 1.01
Net debt to EBITDA 0.00 6.12 4.19

Dividend

Metric MGRC VSTS Rental & Leasing Services median
Dividend yield 1.54% 0.00% 1.38%
Payout ratio 0.30 — 0.24

Size

Metric MGRC VSTS Rental & Leasing Services median
Market cap 3.11b 1.87b 3.37b

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