Financial Analysis: Fortress Transportation and Infrastructure Investors (FTAI) & H&E Equipment Services (HEES)

H&E Equipment Services (NASDAQ: HEES) and Fortress Transportation and Infrastructure Investors (NYSE:FTAI) are both small-cap industrial products companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, dividends, risk, institutional ownership, earnings, analyst recommendations and profitability.

Profitability

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This table compares H&E Equipment Services and Fortress Transportation and Infrastructure Investors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
H&E Equipment Services 10.65% 43.81% 5.25%
Fortress Transportation and Infrastructure Investors 0.06% 0.86% 0.51%

Insider and Institutional Ownership

76.0% of H&E Equipment Services shares are held by institutional investors. Comparatively, 24.5% of Fortress Transportation and Infrastructure Investors shares are held by institutional investors. 12.3% of H&E Equipment Services shares are held by insiders. Comparatively, 0.9% of Fortress Transportation and Infrastructure Investors shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

H&E Equipment Services pays an annual dividend of $1.10 per share and has a dividend yield of 2.9%. Fortress Transportation and Infrastructure Investors pays an annual dividend of $1.32 per share and has a dividend yield of 8.3%. H&E Equipment Services pays out 31.6% of its earnings in the form of a dividend. Fortress Transportation and Infrastructure Investors pays out 1,100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of recent ratings for H&E Equipment Services and Fortress Transportation and Infrastructure Investors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
H&E Equipment Services 0 0 4 0 3.00
Fortress Transportation and Infrastructure Investors 0 0 3 0 3.00

H&E Equipment Services currently has a consensus price target of $40.00, indicating a potential upside of 7.07%. Fortress Transportation and Infrastructure Investors has a consensus price target of $21.00, indicating a potential upside of 32.24%. Given Fortress Transportation and Infrastructure Investors’ higher probable upside, analysts plainly believe Fortress Transportation and Infrastructure Investors is more favorable than H&E Equipment Services.

Earnings and Valuation

This table compares H&E Equipment Services and Fortress Transportation and Infrastructure Investors’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
H&E Equipment Services $1.03 billion 1.29 $109.65 million $3.48 10.74
Fortress Transportation and Infrastructure Investors $217.66 million 6.04 $130,000.00 $0.12 132.33

H&E Equipment Services has higher revenue and earnings than Fortress Transportation and Infrastructure Investors. H&E Equipment Services is trading at a lower price-to-earnings ratio than Fortress Transportation and Infrastructure Investors, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

H&E Equipment Services has a beta of 2.47, suggesting that its stock price is 147% more volatile than the S&P 500. Comparatively, Fortress Transportation and Infrastructure Investors has a beta of 1.55, suggesting that its stock price is 55% more volatile than the S&P 500.

Summary

H&E Equipment Services beats Fortress Transportation and Infrastructure Investors on 11 of the 15 factors compared between the two stocks.

About H&E Equipment Services

H&E Equipment Services, Inc. is an integrated equipment services company. The Company is focused on heavy construction and industrial equipment. As of December 31, 2016, the Company rented, sold and provided parts and services support for four core categories of specialized equipment: hi-lift or aerial work platform equipment; cranes; earthmoving equipment, and industrial lift trucks. The Company’s principal business activities include equipment rentals; new equipment sales; used equipment sales; parts sales, and repair and maintenance services. As of February 16, 2017, the Company had 78 facilities located throughout the West Coast, Intermountain, Southwest, Gulf Coast, Southeast and Mid-Atlantic regions of the United States. The Company rents its heavy construction and industrial equipment to its customers on a daily, weekly and monthly basis. The Company sells new heavy construction and industrial equipment. The Company is a distributor of Grove and Manitowoc crane equipment.

About Fortress Transportation and Infrastructure Investors

Fortress Transportation and Infrastructure Investors LLC owns and acquires infrastructure and related equipment for the transportation of goods and people in Africa, Asia, Europe, North America, and South America. It operates in six segments: Aviation Leasing, Offshore Energy, Shipping Containers, Jefferson Terminal, Railroad, and Ports and Terminals. The Aviation Leasing segment leases aircraft and aircraft engines. As of December 31, 2017, this segment owned and managed 158 aviation assets, including 48 aircraft and 110 commercial jet engines. The Offshore Energy segment owns and leases vessels and equipment that support offshore oil and gas drilling and production activities, including an anchor handling tug supply (AHTS) vessel, a construction support vessel, and a remotely operated vehicle (ROV) support vessel. The Shipping Containers segment engages in the leasing of shipping containers on operating and finance lease basis, which comprise interests in approximately 76,000 maritime shipping containers and related equipment. The Jefferson Terminal segment develops a multi-modal crude oil and refined products handling terminal at the Port of Beaumont, Texas; and owns other assets involved in the transportation and processing of crude oil and related products. The Railroad segment owns a short line railroad that operates from Montreal to the east coast of Maine primarily for the transportation of pulp and paper, construction products, and chemicals. The Ports and Terminals segment operates Repauno, a 1,630 acre deep-water port located along the Delaware River; and Long Ridge, which is a 1,660 acre multi-modal port located along the Ohio River. The company serves operators of transportation and infrastructure networks, including airlines, offshore energy service providers, and shipping lines. Fortress Transportation and Infrastructure Investors LLC was founded in 2011 and is headquartered in New York, New York.

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