Reviewing McGrath RentCorp (MGRC) and Its Rivals

McGrath RentCorp (NASDAQ: MGRC) is one of 120 public companies in the “Business services, not elsewhere classified” industry, but how does it contrast to its peers? We will compare McGrath RentCorp to related businesses based on the strength of its profitability, risk, earnings, valuation, analyst recommendations, institutional ownership and dividends.

Earnings and Valuation

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This table compares McGrath RentCorp and its peers revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
McGrath RentCorp $462.03 million $153.92 million 25.19
McGrath RentCorp Competitors $2.38 billion $315.40 million 13.22

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

Volatility & Risk

McGrath RentCorp has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500. Comparatively, McGrath RentCorp’s peers have a beta of 0.66, indicating that their average share price is 34% less volatile than the S&P 500.

Dividends

McGrath RentCorp pays an annual dividend of $1.04 per share and has a dividend yield of 1.9%. McGrath RentCorp pays out 48.6% of its earnings in the form of a dividend. As a group, “Business services, not elsewhere classified” companies pay a dividend yield of 1.1% and pay out 28.5% of their earnings in the form of a dividend. McGrath RentCorp has raised its dividend for 16 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for McGrath RentCorp and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
McGrath RentCorp 0 1 0 0 2.00
McGrath RentCorp Competitors 700 3547 6934 271 2.59

As a group, “Business services, not elsewhere classified” companies have a potential upside of 7.40%. Given McGrath RentCorp’s peers stronger consensus rating and higher probable upside, analysts plainly believe McGrath RentCorp has less favorable growth aspects than its peers.

Institutional & Insider Ownership

84.1% of McGrath RentCorp shares are owned by institutional investors. Comparatively, 62.5% of shares of all “Business services, not elsewhere classified” companies are owned by institutional investors. 4.6% of McGrath RentCorp shares are owned by insiders. Comparatively, 15.7% of shares of all “Business services, not elsewhere classified” companies are owned 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.

Profitability

This table compares McGrath RentCorp and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
McGrath RentCorp 33.31% 11.85% 4.49%
McGrath RentCorp Competitors 5.39% -51.24% 2.19%

Summary

McGrath RentCorp peers beat McGrath RentCorp on 8 of the 15 factors compared.

McGrath RentCorp Company Profile

McGrath RentCorp, a business to business rental company, rents and sells relocatable modular buildings, portable storage containers, electronic test equipment, and liquid and solid containment tanks and boxes in the United States and internationally. It 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. This segment also provides communications test equipment comprising 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 modular and 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.

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