Contrasting Herc (HRI) & Its Rivals

Herc (NYSE:HRI) is one of 158 public companies in the “Trading Companies & Distributors” industry, but how does it weigh in compared to its competitors? We will compare Herc to related businesses based on the strength of its dividends, institutional ownership, profitability, earnings, risk, valuation and analyst recommendations.

Dividends

Herc pays an annual dividend of $2.80 per share and has a dividend yield of 1.7%. Herc pays out 76.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Trading Companies & Distributors” companies pay a dividend yield of 2.7% and pay out 34.8% of their earnings in the form of a dividend. Herc has raised its dividend for 2 consecutive years. Herc lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Profitability

This table compares Herc and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Herc	2.50%	13.21%	1.85%
Herc Competitors	1.15%	-33.24%	3.54%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Herc and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Herc	0	2	6	1	2.89
Herc Competitors	1463	4951	6818	237	2.43

Herc presently has a consensus price target of $201.57, suggesting a potential upside of 21.99%. As a group, “Trading Companies & Distributors” companies have a potential upside of 8.97%. Given Herc’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Herc is more favorable than its competitors.

Earnings and Valuation

This table compares Herc and its competitors top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Herc	$4.38 billion	$1.00 million	45.02
Herc Competitors	$6.57 billion	$360.25 million	32.93

Herc’s competitors have higher revenue and earnings than Herc. Herc is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Insider and Institutional Ownership

93.1% of Herc shares are held by institutional investors. Comparatively, 51.1% of shares of all “Trading Companies & Distributors” companies are held by institutional investors. 2.2% of Herc shares are held by insiders. Comparatively, 17.1% of shares of all “Trading Companies & Distributors” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Herc has a beta of 2.04, meaning that its stock price is 104% more volatile than the S&P 500. Comparatively, Herc’s competitors have a beta of 1.28, meaning that their average stock price is 28% more volatile than the S&P 500.

Summary

Herc beats its competitors on 8 of the 15 factors compared.

About Herc

Herc Holdings Inc., together with its subsidiaries, operates as an equipment rental supplier. It rents aerial, earthmoving, material handling, trucks and trailers, air compressors, compaction, and lighting equipment, as well as generators, and safety supplies and expendables; and provides ProSolutions, an industry specific solution based services, such as pumping solutions, power generation, climate control, remediation and restoration, and studio and production equipment. The company also sells used equipment and contractor supplies, such as construction consumables, tools, small equipment, and safety supplies; provides repair, maintenance, equipment management, and safety training services, as well as offers ancillary services, such as equipment transport, rental protection, cleaning, refueling, and labor. It serves non-residential and residential construction, specialty trade, restoration, remediation and environment, and facility maintenance contractors; industrial manufacturing industries, including automotive and aerospace, power, metals and mining, agriculture, pulp, paper and wood, food and beverage, and refineries and petrochemical industries; infrastructure and government sectors; and commercial and retail service, hospitality, healthcare, recreation, entertainment production, and special event management customers through its sales team, industry catalogs, as well as through participation and sponsorship of industry events, trade shows, and Internet. As of December 31, 2017, it operated approximately 275 locations in the United States, Canada, China, the United Kingdom, Saudi Arabia, and Qatar. Herc Holdings Inc. is based in Bonita Springs, Florida.