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 $2.7B against $1.8B — 1.5× the size. Vestis Corporation has negative trailing earnings, so its P/E is not meaningful; McGrath RentCorp trades at 18.2×. Vestis Corporation grew revenue faster over the last twelve months: −0.39% against −0.92%. McGrath RentCorp has the higher net margin (16.4% vs −0.20%) and the higher return on invested capital (12.0% vs 2.97%). Both pay a dividend; McGrath RentCorp yields more (1.43% vs 0.70%). 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 18.20 n/m 19.17
P/S 2.97 0.67 0.99
P/B 2.23 2.05 2.23
Price to free cash flow 35.10 12.55 8.31
EV/EBITDA 7.94 12.49 7.84
EV/Sales 2.97 1.11 2.53
Earnings yield 5.49% (0.37%) 0.95%
Free cash flow yield 2.85% 7.97% 1.43%

Profitability

Metric MGRC VSTS Rental & Leasing Services median
Gross margin 48.52% 26.30% 49.40%
Operating margin 25.47% 3.64% 8.49%
Net margin 16.38% (0.20%) 1.01%
Free cash flow margin 8.46% 5.33% 1.87%
Return on equity 12.69% (0.60%) 12.13%
Return on assets 6.33% (0.18%) 0.24%
Return on invested capital 11.96% 2.97% 2.80%

Growth

Metric MGRC VSTS Rental & Leasing Services median
Revenue growth (TTM) (0.92%) (0.39%) 3.21%
EPS growth (last fiscal year) (32.66%) (293.75%) —
Revenue growth, 5-year CAGR 10.52% 1.31% 12.97%
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 1.48
Current ratio 0.26 2.17 1.36
Net debt to EBITDA 0.00 6.12 4.32

Dividend

Metric MGRC VSTS Rental & Leasing Services median
Dividend yield 1.43% 0.70% 1.59%
Payout ratio 0.40 — 0.00

Size

Metric MGRC VSTS Rental & Leasing Services median
Market cap 2.73b 1.83b 2.42b

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