Analyzing Custom Truck One Source (NYSE:CTOS) & Rent-A-Center (NASDAQ:RCII)

Custom Truck One Source (NYSE:CTOS) and Rent-A-Center (NASDAQ:RCII) are both mid-cap auto/tires/trucks companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, earnings, valuation, institutional ownership and risk.

Volatility and Risk

Custom Truck One Source has a beta of 0.3, indicating that its stock price is 70% less volatile than the S&P 500. Comparatively, Rent-A-Center has a beta of 1.54, indicating that its stock price is 54% more volatile than the S&P 500.

Insider & Institutional Ownership

78.4% of Custom Truck One Source shares are owned by institutional investors. Comparatively, 74.9% of Rent-A-Center shares are owned by institutional investors. 26.3% of Custom Truck One Source shares are owned by company insiders. Comparatively, 0.8% of Rent-A-Center shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Custom Truck One Source and Rent-A-Center’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Custom Truck One Source -11.10% N/A -7.41%
Rent-A-Center 6.39% 41.79% 12.34%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Custom Truck One Source and Rent-A-Center, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Custom Truck One Source 0 0 1 0 3.00
Rent-A-Center 0 1 4 1 3.00

Rent-A-Center has a consensus price target of $59.40, indicating a potential downside of 3.65%. Given Rent-A-Center’s higher possible upside, analysts plainly believe Rent-A-Center is more favorable than Custom Truck One Source.

Earnings & Valuation

This table compares Custom Truck One Source and Rent-A-Center’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Custom Truck One Source $302.74 million 7.64 -$21.28 million ($0.91) -10.33
Rent-A-Center $2.81 billion 1.45 $208.12 million $3.53 17.46

Rent-A-Center has higher revenue and earnings than Custom Truck One Source. Custom Truck One Source is trading at a lower price-to-earnings ratio than Rent-A-Center, indicating that it is currently the more affordable of the two stocks.

Summary

Rent-A-Center beats Custom Truck One Source on 11 of the 14 factors compared between the two stocks.

About Custom Truck One Source

Custom Truck One Source, Inc. provides specialty equipment, parts, tools, accessories, and services to the electric utility transmission and distribution, telecommunications, and rail industries in North America. It operates through two segments: Equipment Rental and Sales; and Parts, Tools and Accessories. The company offers specialized equipment to various customer base for the maintenance, repair, upgrade, and installation of critical infrastructure assets, including electric lines, telecommunications networks, and rail systems. As of March 8, 2021, it had a coast-to-coast rental fleet of approximately 4,500 units comprising insulated and non-insulated bucket trucks, digger derricks, line equipment, cranes, pressure diggers and drills, underground equipment, aerial devices, boom trucks, stringing gear, and hi-rail equipment, as well as repair parts, tools, and accessories. The company was formerly known as Nesco Holdings, Inc. and changed its name to Custom Truck One Source, Inc. in April 2021. Custom Truck One Source, Inc. was founded in 1988 and is based in the Kansas City, Missouri.

About Rent-A-Center

Rent-A-Center, Inc., together with its subsidiaries, leases household durable goods to customers on a lease-to-own basis. The company operates in four segments: Rent-A-Center Business, Preferred Lease, Mexico, and Franchising. It offers furniture and accessories, appliances, consumer electronics, computers, tablets and smartphones, tools, tires, handbags, and other accessories under rental purchase agreements. The company also provides merchandise on an installment sales basis; and the lease-to-own transaction to consumers who do not qualify for financing from the traditional retailer through kiosks located within retailer's locations. It operates retail installment sales stores under the Get It Now and Home Choice names; lease-to-own and franchised lease-to-own stores under the Rent-A-Centre, ColorTyme, and RimTyme names; and rentacenter.com, an e-commerce platform. As of December 31, 2020, the company owned and operated approximately 1,845 stores in the United States and Puerto Rico, including 44 retail installment sales stores; 45 preferred lease staffed locations in North Carolina; and 121 stores in Mexico, as well as franchised 462 lease-to-own stores in 33 states. Rent-A-Center, Inc. was founded in 1960 and is headquartered in Plano, Texas.

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