NYSE:URI

Stock Analysis Report

Executive Summary

United Rentals, Inc., through its subsidiaries, operates as an equipment rental company.

Rewards

Trading at 37.4% below its fair value

Earnings are forecast to grow 9.45% per year

Earnings grew by 7.1% over the past year

Risk Analysis

Has a high level of debt



Snowflake Analysis

Good value with acceptable track record.


Similar Companies

Share Price & News

How has United Rentals's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: URI has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.7%

URI

2.9%

US Trade Distributors

1.5%

US Market


1 Year Return

16.3%

URI

9.9%

US Trade Distributors

20.1%

US Market

Return vs Industry: URI exceeded the US Trade Distributors industry which returned 9.9% over the past year.

Return vs Market: URI underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

URIIndustryMarket
7 Day4.7%2.9%1.5%
30 Day-1.2%-2.2%1.4%
90 Day2.3%1.3%8.7%
1 Year16.3%16.3%12.0%9.9%22.7%20.1%
3 Year24.5%24.5%21.2%15.5%50.1%40.5%
5 Year63.4%63.4%43.2%32.4%73.1%54.1%

Price Volatility Vs. Market

How volatile is United Rentals's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is United Rentals undervalued compared to its fair value and its price relative to the market?

37.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: URI ($156.86) is trading below our estimate of fair value ($250.65)

Significantly Below Fair Value: URI is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: URI is good value based on its PE Ratio (10.3x) compared to the Trade Distributors industry average (16.6x).

PE vs Market: URI is good value based on its PE Ratio (10.3x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: URI is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: URI is overvalued based on its PB Ratio (3x) compared to the US Trade Distributors industry average (1.7x).


Next Steps

Future Growth

How is United Rentals forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

9.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: URI's forecast earnings growth (9.4% per year) is above the savings rate (1.7%).

Earnings vs Market: URI's earnings (9.4% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: URI's earnings are forecast to grow, but not significantly.

Revenue vs Market: URI's revenue (3.2% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: URI's revenue (3.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: URI's Return on Equity is forecast to be high in 3 years time (27.5%)


Next Steps

Past Performance

How has United Rentals performed over the past 5 years?

20.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: URI has high quality earnings.

Growing Profit Margin: URI's current net profit margins (12.6%) are lower than last year (13.6%).


Past Earnings Growth Analysis

Earnings Trend: URI's earnings have grown significantly by 20.6% per year over the past 5 years.

Accelerating Growth: URI's earnings growth over the past year (7.1%) is below its 5-year average (20.6% per year).

Earnings vs Industry: URI earnings growth over the past year (7.1%) exceeded the Trade Distributors industry 3.5%.


Return on Equity

High ROE: Whilst URI's Return on Equity (30.65%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is United Rentals's financial position?


Financial Position Analysis

Short Term Liabilities: URI's short term assets ($1.8B) do not cover its short term liabilities ($2.2B).

Long Term Liabilities: URI's short term assets ($1.8B) do not cover its long term liabilities ($12.9B).


Debt to Equity History and Analysis

Debt Level: URI's debt to equity ratio (295.1%) is considered high.

Reducing Debt: URI's debt to equity ratio has reduced from 444.2% to 295.1% over the past 5 years.

Debt Coverage: URI's debt is well covered by operating cash flow (26.8%).

Interest Coverage: URI's interest payments on its debt are well covered by EBIT (3.8x coverage).


Balance Sheet

Inventory Level: URI has a low level of unsold assets or inventory.

Debt Coverage by Assets: URI's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

What is United Rentals's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage2.7%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate URI's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate URI's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if URI's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if URI's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of URI's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.1yrs

Average management tenure


CEO

Matt Flannery (54yo)

0.8yrs

Tenure

US$4,598,553

Compensation

Mr. Matthew J. Flannery, also known as Matt, has been the Chief Executive Officer and President at United Rentals, Inc. since May 8, 2019. Mr. Flannery was President of United Rentals, Inc. since March 8,  ...


CEO Compensation Analysis

Compensation vs Market: Matt's total compensation ($USD4.60M) is below average for companies of similar size in the US market ($USD10.81M).

Compensation vs Earnings: Matt's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Matthew Flannery
President0.8yrsUS$4.60m0.061% $7.1m
Jessica Graziano
Executive VP & CFO1.3yrsUS$2.03m0.011% $1.3m
Dale Asplund
Executive VP & COO0.8yrsUS$3.29m0.015% $1.7m
Craig Pintoff
Executive VP and Chief Administrative & Legal Officer2.9yrsUS$2.99m0.013% $1.6m
Andrew Limoges
VP, Controller & Principal Accounting Officer1.3yrsno data0.00074% $86.3k
Daniel Higgins
VP & Chief Information Officer1.1yrsno datano data
William Grace
Vice President of Investor Relations3.8yrsno datano data
Christopher Hummel
Senior VP & Chief Marketing Officer3.9yrsno datano data
Kenneth Mettel
Senior Vice President of Performance Analytics5.2yrsno datano data
Paul McDonnell
Executive VP & Chief Commercial Officer11.8yrsno data0.011% $1.3m

2.1yrs

Average Tenure

50yo

Average Age

Experienced Management: URI's management team is considered experienced (2.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Matthew Flannery
President0.8yrsUS$4.60m0.061% $7.1m
Gracia Martore
Independent Director2.7yrsUS$257.15kno data
Donald Roof
Independent Director7.8yrsUS$284.65k0.013% $1.6m
Bobby Griffin
Lead Independent Director0.8yrsUS$279.65kno data
Filippo Passerini
Independent Director11.1yrsUS$257.65k0.0074% $859.8k
Michael Kneeland
Non-Executive Chairman0.8yrsUS$13.60m0.21% $24.8m
Jason Papastavrou
Independent Director14.7yrsUS$260.15kno data
José Alvarez
Independent Director11.1yrsUS$264.65k0.0084% $981.2k
Shiv Singh
Independent Director2.8yrsUS$255.15k0.00083% $96.8k
Marc Bruno
Independent Director1.8yrsUS$216.70kno data

2.7yrs

Average Tenure

59yo

Average Age

Experienced Board: URI's board of directors are not considered experienced ( 2.7 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: URI insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

United Rentals, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: United Rentals, Inc.
  • Ticker: URI
  • Exchange: NYSE
  • Founded: 1997
  • Industry: Trading Companies and Distributors
  • Sector: Capital Goods
  • Market Cap: US$11.667b
  • Shares outstanding: 74.38m
  • Website: https://www.unitedrentals.com

Number of Employees


Location

  • United Rentals, Inc.
  • 100 First Stamford Place
  • Suite 700
  • Stamford
  • Connecticut
  • 6902
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
URINYSE (New York Stock Exchange)YesCommon StockUSUSDDec 1997
UR3DB (Deutsche Boerse AG)YesCommon StockDEEURDec 1997
0LIYLSE (London Stock Exchange)YesCommon StockGBUSDDec 1997
URI *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNDec 1997
U1RI34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 2 REPR 1 SHS UNSPONBRBRLJan 2020

Biography

United Rentals, Inc., through its subsidiaries, operates as an equipment rental company. It operates in two segments, General Rentals; and Trench, Power and Fluid Solutions. The General Rentals segment rents general construction and industrial equipment, including backhoes, skid-steer loaders, forklifts, earthmoving equipment, and material handling equipment; aerial work platforms, such as boom lifts and scissor lifts; and general tools and light equipment comprising pressure washers, water pumps, and power tools. It serves construction and industrial companies, manufacturers, utilities, municipalities, homeowners, and government entities. The Trench, Power and Fluid Solutions segment rents specialty construction products that include trench safety equipment, which comprise trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers, and line testing equipment for underground work; and power, as well as heating, ventilating, and air conditioning equipment, including portable diesel generators, electrical distribution equipment, and temperature control equipment. It is also involved in the rental of fluid solutions equipment primarily used for fluid containment, transfer, and treatment. This segment serves construction companies involved in infrastructure projects, and municipalities and industrial companies. The company also sells aerial lifts, reach forklifts, telehandlers, compressors, and generators; construction consumables, tools, small equipment, and safety supplies; and parts for equipment that is owned by its customers, as well as provides repair and maintenance services. It sells its used equipment through its sales force, brokers, and Website, as well as at auctions and directly to manufacturers. As of January 29, 2020, the company operated a network of 1,164 rental locations in North America and 11 in Europe. United Rentals, Inc. was founded in 1997 and is headquartered in Stamford, Connecticut. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 23:55
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.