Textainer Group (TGH) versus United Rentals (URI) Financial Analysis

Textainer Group (NYSE: TGH) and United Rentals (NYSE:URI) are both transportation companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, valuation, analyst recommendations, institutional ownership, profitability and dividends.

Institutional & Insider Ownership

26.4% of Textainer Group shares are owned by institutional investors. Comparatively, 89.6% of United Rentals shares are owned by institutional investors. 1.0% of United Rentals shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.



Profitability

This table compares Textainer Group and United Rentals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Textainer Group 8.88% 4.10% 1.14%
United Rentals 20.23% 39.19% 7.13%

Volatility and Risk

Textainer Group has a beta of 2.5, suggesting that its share price is 150% more volatile than the S&P 500. Comparatively, United Rentals has a beta of 2.56, suggesting that its share price is 156% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Textainer Group and United Rentals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Textainer Group 0 3 2 0 2.40
United Rentals 2 5 6 0 2.31

Textainer Group presently has a consensus target price of $22.20, indicating a potential upside of 31.36%. United Rentals has a consensus target price of $186.20, indicating a potential upside of 12.62%. Given Textainer Group’s stronger consensus rating and higher probable upside, equities analysts clearly believe Textainer Group is more favorable than United Rentals.

Earnings & Valuation

This table compares Textainer Group and United Rentals’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Textainer Group $490.85 million 1.97 $19.36 million $0.41 41.22
United Rentals $6.64 billion 2.08 $1.35 billion $10.59 15.61

United Rentals has higher revenue and earnings than Textainer Group. United Rentals is trading at a lower price-to-earnings ratio than Textainer Group, indicating that it is currently the more affordable of the two stocks.

Summary

United Rentals beats Textainer Group on 11 of the 14 factors compared between the two stocks.

About Textainer Group

Textainer Group Holdings Limited, through its subsidiaries, engages in the purchase, ownership, management, leasing, and disposal of a fleet of intermodal containers worldwide. It operates through three segments: Container Ownership, Container Management, and Container Resale. The company owns and leases standard dry freight containers, refrigerated, and other special-purpose containers. It also provides container management, acquisition, and disposal services to affiliated and unaffiliated container investors. In addition, the company sells containers from its fleet, as well as purchases, leases, or resells containers from shipping line customers, container traders, and other sellers of containers. It operates a fleet of approximately 2.2 million containers, representing 3.3 million twenty-foot equivalent units. The company primarily serves shipping lines, as well as freight forwarding companies and the United States military. Textainer Group Holdings Limited was founded in 1979 and is headquartered in Hamilton, Bermuda.

About United Rentals

United Rentals, Inc., through its subsidiaries, operates as an equipment rental company. It operates in two segments, General Rentals; and Trench, Power, and Pump. The General Rentals segment engages in the rental of general construction and industrial equipment, such as backhoes, skid-steer loaders, forklifts, earthmoving equipment, and material handling equipment; aerial work platforms, such as boom lifts and scissor lifts; and general tools and light equipment comprising pressure washers, water pumps, and power tools. This segment serves construction and industrial companies, manufacturers, utilities, municipalities, and homeowners. The Trench, Power, and Pump segment is involved in the rental of specialty construction products, including trench safety equipment, such as trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers, and line testing equipment for underground work; power and HVAC equipment consisting of portable diesel generators, electrical distribution equipment, and temperature control equipment; and pumps primarily used by energy and petrochemical customers. It serves construction companies involved in infrastructure projects, municipalities, and industrial companies. The company also sells new equipment, such as aerial lifts, reach forklifts, telehandlers, compressors, and generators; contractor supplies, including construction consumables, tools, small equipment, and safety supplies; and parts for equipment that are owned by the company's customers, as well as provides repair and maintenance services. It sells its used equipment through its sales force, brokers, and Website, as well as at auctions and directly to manufacturers. As of January 1, 2018, the company operated 997 rental locations in the United States and Canada. United Rentals, Inc. was founded in 1997 and is headquartered in Stamford, Connecticut.

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