Head-To-Head Comparison: General Finance (GFN) vs. CAI International (CAI)

General Finance (NASDAQ: GFN) and CAI International (NYSE:CAI) are both small-cap business services companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, valuation, analyst recommendations, profitability and earnings.

Institutional and Insider Ownership

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20.4% of General Finance shares are owned by institutional investors. Comparatively, 74.5% of CAI International shares are owned by institutional investors. 25.9% of General Finance shares are owned by insiders. Comparatively, 24.5% of CAI International shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

General Finance has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500. Comparatively, CAI International has a beta of 2.23, indicating that its share price is 123% more volatile than the S&P 500.

Earnings & Valuation

This table compares General Finance and CAI International’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
General Finance $276.93 million 0.82 -$2.96 million ($0.25) -34.00
CAI International $348.39 million 1.32 $72.06 million $2.87 7.82

CAI International has higher revenue and earnings than General Finance. General Finance is trading at a lower price-to-earnings ratio than CAI International, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations for General Finance and CAI International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
General Finance 0 1 1 0 2.50
CAI International 0 1 4 0 2.80

CAI International has a consensus price target of $35.25, indicating a potential upside of 57.02%. Given CAI International’s stronger consensus rating and higher possible upside, analysts clearly believe CAI International is more favorable than General Finance.

Profitability

This table compares General Finance and CAI International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
General Finance 0.18% 0.39% 0.08%
CAI International 20.68% 11.21% 2.51%

Summary

CAI International beats General Finance on 13 of the 14 factors compared between the two stocks.

About General Finance

General Finance Corporation, a specialty rental services company, provides portable storage, modular space, and liquid containment solutions in North America and the Asia-Pacific regions. Its portable storage products include storage containers used in classroom equipment storage, construction equipment and tool storage, disaster shelters, landscaping sheds, recreational equipment storage, and retail inventory storage applications; and freight containers used in freight transportation by road and rail. The company's modular space products comprise office container products, modular buildings, and mobile offices used in various applications, such as general administrative office space, military installations, workforce living accommodations, bank branches, classrooms/education, construction offices, daycare facilities, dormitories, healthcare facilities, rental facilities, retail space, and shelters. Its liquid containment products consists of portable liquid storage tanks for well-site liquid containment needs, expansion/upgrade projects, highway construction/groundwater sewage, infrastructure projects, industrial projects, mining pit pump works, municipal sewer and water projects, non-residential construction projects, pipeline construction and maintenance, and refinery turnaround applications. The company provides ancillary products, such as steps, ramps, furniture, portable toilets, security systems, shelving, mud pumps, hoses, splitter valves, tee connectors, and other items used in connection with leased equipment. It also manufactures various steel-based products, such as chassis, storm shelters, blast-resistant modules, and specialty tanks. General Finance Corporation serves commercial, construction, transportation, industrial, energy, manufacturing, mining, retail, and education industries, as well as government clients. The company was founded in 2005 and is headquartered in Pasadena, California.

About CAI International

CAI International, Inc. operates as transportation finance and logistics company in the United States and internationally. The company operates through three segments: Container Leasing, Rail Leasing, and Logistics. It leases, re-leases, and disposes equipment; and contracts for the repair, repositioning, and storage of equipment. The company leases its container equipment to lessees under long-term, short-term, and finance leases. It also sells containers; and provides container management services to third-party investors, as well as sells used containers. In addition, the company leases railcars consisting of box cars for paper and forest products; covered hoppers for grain, cement, sand, plastic pallets, and other industrial products; general purpose tank cars that are used to transport food-grade, and other liquid and gaseous commodities; gondolas for coal and steel; and general service flat cars. Further, it offers domestic and international logistics services, including intermodal, truck brokerage, port drayage, warehousing, international ocean freight, and freight forwarding, as well as the arrangement and coordination of international air freight services and customs brokerage; international export and import services for full container loads, less than container loads, perishable cargo, project cargo, and airfreight; and transportation management services and technology solutions, including shipment optimization, load consolidation, mode selection, carrier management, load planning and execution, and Web-based shipment visibility. As of December 31, 2017, the company had a container fleet comprised 1,282,739 cost equivalent units; and an owned fleet of 7,172 railcars in North America. The company was formerly known as Container Applications International, Inc. and changed its name to CAI International, Inc. in February 2007. CAI International, Inc. was founded in 1989 and is headquartered in San Francisco, California.

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