CAI International (CAI) versus McGrath RentCorp (MGRC) Financial Analysis

CAI International (NYSE: CAI) and McGrath RentCorp (NASDAQ:MGRC) are both small-cap transportation companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, analyst recommendations and profitability.

Dividends

McGrath RentCorp pays an annual dividend of $1.36 per share and has a dividend yield of 2.1%. CAI International does not pay a dividend. McGrath RentCorp pays out 63.6% of its earnings in the form of a dividend. McGrath RentCorp has raised its dividend for 16 consecutive years.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CAI International 0 1 5 0 2.83
McGrath RentCorp 0 1 0 0 2.00

CAI International currently has a consensus price target of $35.40, indicating a potential upside of 58.46%. Given CAI International’s stronger consensus rating and higher probable upside, analysts clearly believe CAI International is more favorable than McGrath RentCorp.

Insider & Institutional Ownership

79.7% of CAI International shares are owned by institutional investors. Comparatively, 78.6% of McGrath RentCorp shares are owned by institutional investors. 24.5% of CAI International shares are owned by insiders. Comparatively, 2.0% of McGrath RentCorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
CAI International 23.17% 12.58% 2.88%
McGrath RentCorp 33.97% 11.81% 4.80%

Risk and Volatility

CAI International has a beta of 2.26, indicating that its share price is 126% more volatile than the S&P 500. Comparatively, McGrath RentCorp has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500.

Earnings & Valuation

This table compares CAI International and McGrath RentCorp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CAI International $348.39 million 1.31 $72.06 million $2.87 7.78
McGrath RentCorp $462.03 million 3.35 $153.92 million $2.14 30.01

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

Summary

CAI International beats McGrath RentCorp on 9 of the 17 factors compared between the two stocks.

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.

About McGrath RentCorp

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.

Receive News & Ratings for CAI International Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for CAI International and related companies with MarketBeat.com's FREE daily email newsletter.


Leave a Reply