NasdaqGS:MGRC

Stock Analysis Report

Executive Summary

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


Snowflake Analysis

Established dividend payer and good value.


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

Stable Share Price: MGRC's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

8.7%

MGRC

4.3%

US Commercial Services

10.5%

US Market


1 Year Return

-9.6%

MGRC

-15.3%

US Commercial Services

-11.5%

US Market

Return vs Industry: MGRC exceeded the US Commercial Services industry which returned -15.3% over the past year.

Return vs Market: MGRC exceeded the US Market which returned -11.5% over the past year.


Shareholder returns

MGRCIndustryMarket
7 Day8.7%4.3%10.5%
30 Day-27.3%-22.1%-15.4%
90 Day-34.0%-24.0%-21.4%
1 Year-7.5%-9.6%-12.4%-15.3%-9.6%-11.5%
3 Year64.2%52.4%14.9%7.6%12.6%5.4%
5 Year79.6%55.5%40.9%26.0%32.8%18.1%

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?

40.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MGRC ($51.16) is trading below our estimate of fair value ($86.52)

Significantly Below Fair Value: 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 (12.8x) compared to the Commercial Services industry average (21x).

PE vs Market: MGRC is good value based on its PE Ratio (12.8x) compared to the US market (13x).


Price to Earnings Growth Ratio

PEG Ratio: MGRC is poor value based on its PEG Ratio (2.9x)


Price to Book Ratio

PB vs Industry: MGRC is overvalued based on its PB Ratio (2x) compared to the US Commercial Services industry average (1.3x).


Next Steps

Future Growth

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

4.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MGRC's forecast earnings growth (4.4% per year) is above the savings rate (1.7%).

Earnings vs Market: MGRC's earnings (4.4% per year) are forecast to grow slower than the US market (12.3% per year).

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

Revenue vs Market: MGRC's revenue (2.5% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: MGRC's revenue (2.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MGRC's Return on Equity is forecast to be low in 3 years time (15.1%).


Next Steps

Past Performance

How has McGrath RentCorp performed over the past 5 years?

24.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MGRC has high quality earnings.

Growing Profit Margin: MGRC's current net profit margins (17%) are higher than last year (15.9%).


Past Earnings Growth Analysis

Earnings Trend: MGRC's earnings have grown significantly by 24.5% per year over the past 5 years.

Accelerating Growth: MGRC's earnings growth over the past year (21.9%) is below its 5-year average (24.5% per year).

Earnings vs Industry: MGRC earnings growth over the past year (21.9%) exceeded the Commercial Services industry 2.5%.


Return on Equity

High ROE: MGRC's Return on Equity (15.3%) is considered low.


Next Steps

Financial Health

How is McGrath RentCorp's financial position?


Financial Position Analysis

Short Term Liabilities: MGRC's short term assets ($165.8M) exceed its short term liabilities ($102.6M).

Long Term Liabilities: MGRC's short term assets ($165.8M) do not cover its long term liabilities ($573.3M).


Debt to Equity History and Analysis

Debt Level: MGRC's debt to equity ratio (46.3%) is considered high.

Reducing Debt: MGRC's debt to equity ratio has reduced from 76% to 46.3% over the past 5 years.

Debt Coverage: MGRC's debt is well covered by operating cash flow (64.1%).

Interest Coverage: MGRC's interest payments on its debt are well covered by EBIT (11.5x 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 0.6x debt).


Next Steps

Dividend

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

3.28%

Current Dividend Yield


Upcoming Dividend Payment

TodayMar 28 2020Ex Dividend DateApr 14 2020Dividend Pay DateApr 30 202016 days from Ex DividendBuy in the next 16 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: MGRC's dividend (3.28%) is higher than the bottom 25% of dividend payers in the US market (1.98%).

High Dividend: MGRC's dividend (3.28%) is low compared to the top 25% of dividend payers in the US market (5.45%).


Stability and Growth of Payments

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 (37.6%), 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 (39.7% payout ratio).


Next Steps

Management

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

10.8yrs

Average management tenure


CEO

Joe Hanna (56yo)

3.08s

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 ($USD2.48M) is below average for companies of similar size in the US market ($USD4.54M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Joseph Hanna
President3.08yrsUS$2.48m0.21% $2.6m
Keith Pratt
Executive VP & CFO14yrsUS$1.24m0.093% $1.2m
Philip Hawkins
VP and Division Manager of Mobile Modular & Enviroplex12.75yrsUS$728.60k0.019% $236.7k
Kristina Van Trease-Whitney
VP & Division Manager of Adler Tank Rentals10.75yrsUS$698.05k0.085% $1.1m
John Skenesky
VP & Division Manager of TRS-RenTelco8.33yrsUS$616.50k0.037% $461.4k
David Whitney
VP, Controller & Principal Accounting Officer14yrsno data0.085% $1.1m
Melodie Craft
Vice President of Legal Affairs & Risk Management2.17yrsno data0.0017% $21.5k
Kay Dashner
VP of Human Resources & Secretary15.17yrsno data0.033% $404.8k
Dennis Kakures
Consultant3.08yrsUS$1.63mno data

10.8yrs

Average Tenure

54yo

Average Age

Experienced Management: MGRC's management team is seasoned and experienced (10.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Joseph Hanna
President3.08yrsUS$2.48m0.21% $2.6m
Ronald Zech
Non-Executive Chairman of the Board10.75yrsUS$204.91k0.13% $1.6m
Elizabeth Fetter
Independent Director6.08yrsUS$179.91k0.021% $258.4k
Bradley Shuster
Independent Director2.67yrsUS$174.91k0.016% $194.4k
Dennis Stradford
Independent Director18.17yrsUS$176.91k0.021% $255.8k
William Dawson
Independent Director22.17yrsUS$186.91k0.066% $823.7k
M. Smith
Independent Director9.67yrsUS$176.91k0.10% $1.3m
Kimberly Box
Independent Director1.67yrsUS$94.35k0.0045% $56.3k

7.9yrs

Average Tenure

64yo

Average Age

Experienced Board: MGRC's board of directors are considered experienced (7.9 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold 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

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$1.243b
  • Shares outstanding: 24.30m
  • Website: https://www.mgrc.com

Number of Employees


Location

  • McGrath RentCorp
  • 5700 Las Positas Road
  • Livermore
  • California
  • 94551-7800
  • 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 equipment and related accessories, and liquid and solid containment tanks and boxes. The company operates through four segments: Mobile Modular, TRS-RenTelco, Adler Tanks, and Enviroplex. The Mobile Modular segment rents and sells modular buildings designed for use as classrooms, temporary offices adjacent to existing facilities, sales offices, construction field offices, restroom buildings, health care clinics, child care facilities, office spaces, and various other purposes; and portable storage containers. The TRS-RenTelco segment rents and sells general purpose electronic test equipment, such as oscilloscopes, amplifiers, analyzers, signal source, and power source test equipment primarily to aerospace, defense, electronics, industrial, research, and semiconductor industries. It also provides communications test equipment, including network and transmission test equipment for various fiber, copper, and wireless networks to the manufacturers of communications equipment and products, electrical and communications installation contractors, field technicians, and service providers. The Adler Tanks segment rents fixed axle steel tanks for storing groundwater, wastewater, volatile organic liquids, sewage, slurry and bio sludge, oil and water mixtures, and chemicals; vacuum containers for sludge and solid materials; dewatering boxes for the separation of water contained in sludge and slurry; and roll-off and trash boxes for temporary storage and transportation of solid waste. The Enviroplex segment manufactures and sells portable classrooms directly to public school districts and other educational institutions in California. McGrath RentCorp was founded in 1979 and is headquartered in Livermore, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/28 01:12
End of Day Share Price2020/03/27 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.