Critical Comparison: Ryder System (R) and Hertz Global (HTZ)

Ryder System (NYSE: R) and Hertz Global (NYSE:HTZ) are both transportation companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitability.

Insider and Institutional Ownership

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93.4% of Ryder System shares are held by institutional investors. 2.3% of Ryder System shares are held by insiders. Comparatively, 0.3% of Hertz Global shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Ryder System and Hertz Global’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ryder System $7.33 billion 0.51 $790.55 million $4.53 15.44
Hertz Global $8.80 billion 0.20 $327.00 million ($1.59) -13.00

Ryder System has higher earnings, but lower revenue than Hertz Global. Hertz Global is trading at a lower price-to-earnings ratio than Ryder System, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Ryder System has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500. Comparatively, Hertz Global has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500.

Profitability

This table compares Ryder System and Hertz Global’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ryder System 10.78% 10.47% 2.15%
Hertz Global 3.73% -13.01% -0.63%

Dividends

Ryder System pays an annual dividend of $2.08 per share and has a dividend yield of 3.0%. Hertz Global does not pay a dividend. Ryder System pays out 45.9% of its earnings in the form of a dividend. Ryder System has raised its dividend for 9 consecutive years.

Analyst Recommendations

This is a summary of current recommendations for Ryder System and Hertz Global, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ryder System 1 3 4 0 2.38
Hertz Global 3 3 2 0 1.88

Ryder System presently has a consensus price target of $86.29, indicating a potential upside of 23.39%. Hertz Global has a consensus price target of $15.00, indicating a potential downside of 27.43%. Given Ryder System’s stronger consensus rating and higher probable upside, analysts clearly believe Ryder System is more favorable than Hertz Global.

Summary

Ryder System beats Hertz Global on 14 of the 16 factors compared between the two stocks.

About Ryder System

Ryder System, Inc. is engaged in offering transportation and supply chain management solutions. The Company operates through three segments: Fleet Management Solutions (FMS), which provides leasing, commercial rental, contract maintenance, and contract-related maintenance of trucks, tractors and trailers to customers principally in the United States, Canada and the United Kingdom; Dedicated Transportation Solutions (DTS), which provides vehicles and drivers as part of a dedicated transportation solution in the United States, and Supply Chain Solutions (SCS), which provides supply chain solutions, including distribution and transportation services in North America and Asia. Through its FMS business, the Company provides its customers with various fleet solutions. In addition, it provides its customers to purchase a selection of used trucks, tractors and trailers through its used vehicle sales program. Its customer base includes enterprises operating in various industries.

About Hertz Global

The Hertz Corporation, a subsidiary of Hertz Global Holdings, Inc., operates the Hertz, Dollar and Thrifty vehicle rental brands in approximately 9,700 corporate and franchisee locations throughout North America, Europe, The Caribbean, Latin America, Africa, the Middle East, Asia, Australia, and New Zealand. The Hertz Corporation is one of the largest worldwide airport general use vehicle rental companies.

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