NasdaqGS:MGRC

Stock Analysis Report

Executive Summary

McGrath RentCorp operates as a business to business rental company in the United States and internationally.

Snowflake

Fundamentals

Established dividend payer with adequate balance sheet.


Similar Companies

Share Price & News

How has McGrath RentCorp's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

1.6%

MGRC

2.0%

US Commercial Services

3.4%

US Market


1 Year Return

31.3%

MGRC

14.4%

US Commercial Services

5.4%

US Market

Return vs Industry: MGRC exceeded the US Commercial Services industry which returned 14.4% over the past year.

Return vs Market: MGRC exceeded the US Market which returned 5.4% over the past year.


Shareholder returns

MGRCIndustryMarket
7 Day1.6%2.0%3.4%
30 Day-3.6%2.1%-1.0%
90 Day2.5%0.5%-0.4%
1 Year33.8%31.3%18.8%14.4%7.7%5.4%
3 Year135.4%119.3%70.0%58.4%46.2%36.8%
5 Year118.5%89.8%103.0%82.7%65.6%47.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is McGrath RentCorp undervalued compared to its fair value and its price relative to the market?

48.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: MGRC ($66.8) is trading below our estimate of fair value ($130.41)

Significantly Undervalued: MGRC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: MGRC is good value based on its PE Ratio (18.6x) compared to the Commercial Services industry average (25.5x).

PE vs Market: MGRC is poor value based on its PE Ratio (18.6x) compared to the US market (17.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: MGRC is poor value based on its PEG Ratio (2.2x)


Price to Book Ratio

PB vs Industry: MGRC is overvalued based on its PB Ratio (2.7x) compared to the US Commercial Services industry average (1.8x).


Next Steps

Future Growth

How is McGrath RentCorp forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

8.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MGRC's forecast earnings growth (8.4% per year) is above the savings rate (2.7%).

Earnings vs Market: MGRC's earnings (8.4% per year) are forecast to grow slower than the US market (14.3% per year).

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

Revenue vs Market: MGRC's revenue (4.4% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: MGRC's revenue (4.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: MGRC's Return on Equity is forecast to be low in 3 years time (15.2%).


Next Steps

Past Performance

How has McGrath RentCorp performed over the past 5 years?

27.5%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: MGRC's earnings have grown significantly by 27.5% per year over the past 5 years.

Accelerating Growth: MGRC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: MGRC had negative earnings growth (-47.3%) over the past year, making it difficult to compare to the Commercial Services industry average (-2.4%).


Return on Equity

High ROE: MGRC's Return on Equity (14.7%) is considered low.


Return on Assets

ROA vs Industry: MGRC has a higher Return on Assets than the Commercial Services industry average last year.


Return on Capital Employed

ROCE Improving: MGRC has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is McGrath RentCorp's financial position?


Financial Position Analysis

Short Term Liabilities: MGRC's short term assets ($165.4M) exceeds its short term liabilities ($99.3M)

Long Term Liabilities: MGRC's short term assets (165.4M) do not cover its long term liabilities (588.7M)


Debt to Equity History and Analysis

Debt Level: MGRC's debt to equity ratio (51%) is considered high

Reducing Debt: MGRC's debt to equity ratio has reduced from 75.6% to 51% over the past 5 years.

Debt Coverage: MGRC's debt is well covered by operating cash flow (59.9%).

Interest Coverage: MGRC's interest payments on its debt are well covered by EBIT (10.2x coverage).


Balance Sheet

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

Debt Coverage by Assets: MGRC's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

What is McGrath RentCorp's current dividend yield, its reliability and sustainability?

2.25%

Current Dividend Yield


Dividend Yield vs Market

company2.2%marketbottom25%1.5%markettop25%3.8%industryaverage1.6%forecastin3Years2.2%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: MGRC's dividend (2.25%) is higher than the bottom 25% of dividend payers in the US market (1.46%).

High Dividend: MGRC's dividend (2.25%) is low compared to the top 25% of dividend payers in the US market (3.77%).

Stable Dividend: MGRC's dividends per share have been stable in the past 10 years.

Growing Dividend: MGRC's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (39.8%), MGRC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MGRC's dividends in 3 years are forecast to be well covered by earnings (37.9% payout ratio).


Next Steps

Management

What is the CEO of McGrath RentCorp's salary, the management and board of directors tenure and is there insider trading?

10.3yrs

Average management tenure


CEO

Joe Hanna (56yo)

2.7yrs

Tenure

US$2,482,289

Compensation

Mr. Joseph F. Hanna, also known as Joe, has been the Chief Executive Officer and President of McGrath RentCorp since February 23, 2017. Mr. Hanna served as Chief Operating Officer and Senior Vice President ...


CEO Compensation Analysis

Compensation vs. Market: Joe's total compensation ($USD2.48M) is below average for companies of similar size in the US market ($USD4.07M).

Compensation vs Earnings: Joe's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

10.3yrs

Average Tenure

54yo

Average Age

Experienced Management: MGRC's management team is seasoned and experienced (10.3 years average tenure).


Board Age and Tenure

7.5yrs

Average Tenure

64yo

Average Age

Experienced Board: MGRC's board of directors are considered experienced (7.5 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellUS$68,78917 Sep 19
Kay Dashner
EntityIndividual
Role
Head of Human Resources
VP of Human Resources & Secretary
Shares1,000
Max PriceUS$68.79
SellUS$216,93912 Sep 19
Philip Hawkins
EntityIndividual
Role
Other Key Executive
VP & Division Manager of Mobile Modular
Shares3,310
Max PriceUS$65.54
SellUS$265,07221 Aug 19
Keith Pratt
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares3,951
Max PriceUS$67.15
SellUS$32,90620 Aug 19
David Whitney
EntityIndividual
Role
Chief Accounting Officer
VP, Controller & Principal Accounting Officer
Shares504
Max PriceUS$65.29
SellUS$96,47420 Aug 19
Kristina Van Trease-Whitney
EntityIndividual
Role
Other Key Executive
VP & Division Manager of Adler Tank Rentals
Shares1,481
Max PriceUS$65.29
SellUS$94,83512 Aug 19
John Skenesky
EntityIndividual
Role
Other Key Executive
VP & Division Manager of TRS-RenTelco
Shares1,459
Max PriceUS$65.00
SellUS$139,83807 Aug 19
Elizabeth Fetter
EntityIndividual
Role
Member of the Board of Directors
Director
Shares2,200
Max PriceUS$63.56
SellUS$461,86505 Aug 19
Kristina Van Trease-Whitney
EntityIndividual
Role
Other Key Executive
VP & Division Manager of Adler Tank Rentals
Shares6,716
Max PriceUS$68.87
SellUS$210,81505 Aug 19
David Whitney
EntityIndividual
Role
Chief Accounting Officer
VP, Controller & Principal Accounting Officer
Shares3,061
Max PriceUS$68.87
SellUS$174,18705 Aug 19
Keith Pratt
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares2,513
Max PriceUS$69.31
SellUS$149,96905 Aug 19
Dennis Stradford
EntityIndividual
Role
Member of the Board of Directors
Director
Shares2,200
Max PriceUS$68.17
SellUS$68,22310 May 19
Kristina Van Trease-Whitney
EntityIndividual
Role
Other Key Executive
VP & Division Manager of Adler Tank Rentals
Shares1,078
Max PriceUS$63.29
SellUS$61,76009 May 19
Keith Pratt
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares962
Max PriceUS$64.20
SellUS$16,42009 May 19
Melodie Craft
EntityIndividual
Role
Chief Legal Officer
Vice President of Legal Affairs & Risk Management
Shares257
Max PriceUS$63.89
SellUS$235,87409 May 19
John Lieffrig
EntityIndividual
Shares3,731
Max PriceUS$63.22
SellUS$34,48909 May 19
David Whitney
EntityIndividual
Role
Chief Accounting Officer
VP, Controller & Principal Accounting Officer
Shares545
Max PriceUS$63.28
SellUS$323,45107 May 19
Philip Hawkins
EntityIndividual
Role
Other Key Executive
VP & Division Manager of Mobile Modular
Shares5,101
Max PriceUS$63.41
SellUS$114,02819 Mar 19
David Whitney
EntityIndividual
Role
Chief Accounting Officer
VP, Controller & Principal Accounting Officer
Shares1,967
Max PriceUS$57.97
SellUS$248,81219 Mar 19
Kristina Van Trease-Whitney
EntityIndividual
Role
Other Key Executive
VP & Division Manager of Adler Tank Rentals
Shares4,294
Max PriceUS$57.97
SellUS$132,08714 Mar 19
Kristina Van Trease-Whitney
EntityIndividual
Role
Other Key Executive
VP & Division Manager of Adler Tank Rentals
Shares2,258
Max PriceUS$58.50
SellUS$439,91011 Mar 19
Philip Hawkins
EntityIndividual
Role
Other Key Executive
VP & Division Manager of Mobile Modular
Shares7,693
Max PriceUS$57.99
SellUS$101,43507 Mar 19
John Skenesky
EntityIndividual
Role
Other Key Executive
VP & Division Manager of TRS-RenTelco
Shares1,719
Max PriceUS$59.01
SellUS$152,30905 Mar 19
Keith Pratt
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares2,537
Max PriceUS$60.03
SellUS$164,38210 Dec 18
Dennis Stradford
EntityIndividual
Role
Member of the Board of Directors
Director
Shares3,200
Max PriceUS$51.37
SellUS$97,57320 Nov 18
Keith Pratt
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares1,841
Max PriceUS$53.00
SellUS$69,89008 Nov 18
John Lieffrig
EntityIndividual
Shares1,284
Max PriceUS$54.43

Ownership Breakdown


Management Team

  • Keith Pratt (56yo)

    Executive VP & CFO

    • Tenure: 13.6yrs
    • Compensation: US$1.24m
  • Dennis Kakures (62yo)

    Consultant

    • Tenure: 2.7yrs
    • Compensation: US$1.63m
  • Joe Hanna (56yo)

    President

    • Tenure: 2.7yrs
    • Compensation: US$2.48m
  • David Whitney (54yo)

    VP, Controller & Principal Accounting Officer

    • Tenure: 13.6yrs
  • Kristina Van Trease-Whitney (49yo)

    VP & Division Manager of Adler Tank Rentals

    • Tenure: 10.3yrs
    • Compensation: US$698.05k
  • Philip Hawkins (43yo)

    VP & Division Manager of Mobile Modular

    • Tenure: 12.3yrs
    • Compensation: US$728.60k
  • Kay Dashner (60yo)

    VP of Human Resources & Secretary

    • Tenure: 14.8yrs
  • John Skenesky (52yo)

    VP & Division Manager of TRS-RenTelco

    • Tenure: 7.9yrs
    • Compensation: US$616.50k
  • Melodie Craft (44yo)

    Vice President of Legal Affairs & Risk Management

    • Tenure: 1.8yrs

Board Members

  • Ron Zech (75yo)

    Non-Executive Chairman of the Board

    • Tenure: 10.3yrs
    • Compensation: US$204.91k
  • Liz Fetter (61yo)

    Director

    • Tenure: 5.7yrs
    • Compensation: US$179.91k
  • Brad Shuster (64yo)

    Director

    • Tenure: 2.3yrs
    • Compensation: US$174.91k
  • Dennis Stradford (72yo)

    Director

    • Tenure: 17.8yrs
    • Compensation: US$176.91k
  • William Dawson (64yo)

    Director

    • Tenure: 21.8yrs
    • Compensation: US$186.91k
  • Joe Hanna (56yo)

    President

    • Tenure: 2.7yrs
    • Compensation: US$2.48m
  • Rick Smith (72yo)

    Director

    • Tenure: 9.3yrs
    • Compensation: US$176.91k
  • kim Box (59yo)

    Director

    • Tenure: 1.3yrs
    • Compensation: US$94.35k

Company Information

McGrath RentCorp's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: McGrath RentCorp
  • Ticker: MGRC
  • Exchange: NasdaqGS
  • Founded: 1979
  • Industry: Diversified Support Services
  • Sector: Commercial Services
  • Market Cap: US$1.620b
  • Shares outstanding: 24.25m
  • Website: https://www.mgrc.com

Number of Employees


Location

  • McGrath RentCorp
  • 5700 Las Positas Road
  • Livermore
  • California
  • 94551
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MGRCNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDNov 1984

Biography

McGrath RentCorp operates as a business to business rental company in the United States and internationally. It rents and sells relocatable modular buildings, portable storage containers, electronic test e ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/15 23:40
End of Day Share Price2019/10/15 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.