Contrasting United Rentals (NYSE:URI) and Global Industrial (NYSE:GIC)

United Rentals (NYSE:URI) and Global Industrial (NYSE:GIC) are both industrials companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Insider & Institutional Ownership

96.3% of United Rentals shares are owned by institutional investors. Comparatively, 31.2% of Global Industrial shares are owned by institutional investors. 0.5% of United Rentals shares are owned by insiders. Comparatively, 64.5% of Global Industrial shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

United Rentals has a beta of 1.79, meaning that its share price is 79% more volatile than the S&P 500. Comparatively, Global Industrial has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for United Rentals and Global Industrial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Rentals	1	2	15	0	2.78
Global Industrial	0	2	0	0	2.00

United Rentals presently has a consensus target price of $1,243.62, suggesting a potential upside of 21.20%. Given United Rentals’ stronger consensus rating and higher possible upside, equities research analysts clearly believe United Rentals is more favorable than Global Industrial.

Profitability

This table compares United Rentals and Global Industrial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Rentals	15.67%	31.72%	9.47%
Global Industrial	6.06%	21.49%	11.60%

Dividends

United Rentals pays an annual dividend of $7.88 per share and has a dividend yield of 0.8%. Global Industrial pays an annual dividend of $1.12 per share and has a dividend yield of 2.7%. United Rentals pays out 18.9% of its earnings in the form of a dividend. Global Industrial pays out 50.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. United Rentals has increased its dividend for 3 consecutive years and Global Industrial has increased its dividend for 9 consecutive years. Global Industrial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares United Rentals and Global Industrial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Rentals	$16.10 billion	3.97	$2.49 billion	$41.64	24.64
Global Industrial	$1.38 billion	1.16	$72.10 million	$2.24	18.78

United Rentals has higher revenue and earnings than Global Industrial. Global Industrial is trading at a lower price-to-earnings ratio than United Rentals, indicating that it is currently the more affordable of the two stocks.

Summary

United Rentals beats Global Industrial on 13 of the 17 factors compared between the two stocks.

About United Rentals

United Rentals, Inc., through its subsidiaries, operates as an equipment rental company. It operates in two segments, General Rentals and Specialty. The General Rentals segment rents general construction and industrial equipment includes backhoes, skid-steer loaders, forklifts, earthmoving equipment, and material handling equipment; aerial work platforms, such as boom and scissor lifts; and general tools and light equipment comprising pressure washers, water pumps, and power tools for construction and industrial companies, manufacturers, utilities, municipalities, homeowners, and government entities. The specialty segment rents specialty construction products, including trench safety equipment consists of trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers, and line testing equipment for underground work; power and heating, ventilating, and air conditioning equipment, such as portable diesel generators, electrical distribution equipment, and temperature control equipment; fluid solutions equipment for fluid containment, transfer, and treatment; and mobile storage equipment and modular office space. This segment serves construction companies involved in infrastructure projects, and municipalities and industrial companies. It 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. The company sells used equipment through its sales force, brokers, website, at auctions, and directly to manufacturers. The company operates in the United States, Canada, Europe, Australia, and New Zealand. United Rentals, Inc. was incorporated in 1997 and is headquartered in Stamford, Connecticut.

About Global Industrial

Global Industrial Company operates as an industrial distributor of various industrial and maintenance, repair, and operation (MRO) products in North America. It offers storage and shelving, safety and security, carts and trucks, HVAC and fans, furniture and decor, material handling, janitorial and facility maintenance, workbenches and shop desks, tools and instruments, plumbing and pumps, office and school supplies, packaging and shipping, lighting and electrical, foodservice and retail, medical and laboratory, motors and power transmission, building supplies, machining, fasteners and hardware, vehicle maintenance, and raw materials. The company offers industrial and MRO products under the Global, GlobalIndustrial.com, Nexel, Paramount, Interion, and Absocold trademarks. It serves businesses; state, local, and private educational organizations; and government entities through relationship marketers, e-commerce sites, signature campaigns, and catalogs. The company was formerly known as Systemax Inc. Global Industrial Company was founded in 1949 and is headquartered in Port Washington, New York.