HERC HOLDINGS INC (HRI) Stock Fundamental Analysis
NYSE:HRI - New York Stock Exchange, Inc. - US42704L1044 - Common Stock - Currency: USD
Overall HRI gets a fundamental rating of 5 out of 10. We evaluated HRI against 47 industry peers in the Trading Companies & Distributors industry. HRI scores excellent on profitability, but there are concerns on its financial health. HRI has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
HRI had positive earnings in the past year.
HRI had a positive operating cash flow in the past year.
Each year in the past 5 years HRI has been profitable.
In the past 5 years HRI always reported a positive cash flow from operatings.
1.2 Ratios
HRI has a worse Return On Assets (1.66%) than 61.70% of its industry peers.
Looking at the Return On Equity, with a value of 9.43%, HRI is in line with its industry, outperforming 48.94% of the companies in the same industry.
The Return On Invested Capital of HRI (7.56%) is better than 61.70% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HRI is in line with the industry average of 9.63%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.66% | ||
| ROE | 9.43% | ||
| ROIC | 7.56% |
ROA(3y)4.38%
ROA(5y)4.04%
ROE(3y)24.04%
ROE(5y)21%
ROIC(3y)7.69%
ROIC(5y)7%
1.3 Margins
Looking at the Profit Margin, with a value of 3.53%, HRI is in line with its industry, outperforming 53.19% of the companies in the same industry.
In the last couple of years the Profit Margin of HRI has grown nicely.
HRI has a better Operating Margin (20.11%) than 87.23% of its industry peers.
HRI's Operating Margin has improved in the last couple of years.
HRI's Gross Margin of 60.52% is amongst the best of the industry. HRI outperforms 93.62% of its industry peers.
In the last couple of years the Gross Margin of HRI has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.11% | ||
| PM (TTM) | 3.53% | ||
| GM | 60.52% |
OM growth 3Y4.56%
OM growth 5Y10.96%
PM growth 3Y-18.21%
PM growth 5Y20%
GM growth 3Y1.25%
GM growth 5Y3.11%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), HRI is destroying value.
HRI has more shares outstanding than it did 1 year ago.
The number of shares outstanding for HRI has been reduced compared to 5 years ago.
Compared to 1 year ago, HRI has an improved debt to assets ratio.
2.2 Solvency
HRI has an Altman-Z score of 1.33. This is a bad value and indicates that HRI is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.33, HRI is doing worse than 78.72% of the companies in the same industry.
A Debt/Equity ratio of 3.04 is on the high side and indicates that HRI has dependencies on debt financing.
HRI has a Debt to Equity ratio of 3.04. This is amonst the worse of the industry: HRI underperforms 85.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.04 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.33 |
ROIC/WACC0.78
WACC9.64%
2.3 Liquidity
A Current Ratio of 1.50 indicates that HRI should not have too much problems paying its short term obligations.
HRI has a Current ratio of 1.50. This is in the lower half of the industry: HRI underperforms 68.09% of its industry peers.
A Quick Ratio of 1.50 indicates that HRI should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.50, HRI is doing good in the industry, outperforming 63.83% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.5 | ||
| Quick Ratio | 1.5 |
3. Growth
3.1 Past
HRI shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -3.74%.
Measured over the past years, HRI shows a very strong growth in Earnings Per Share. The EPS has been growing by 48.42% on average per year.
HRI shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.34%.
Measured over the past years, HRI shows a quite strong growth in Revenue. The Revenue has been growing by 12.29% on average per year.
EPS 1Y (TTM)-3.74%
EPS 3Y19.73%
EPS 5Y48.42%
EPS Q2Q%-44.92%
Revenue 1Y (TTM)8.34%
Revenue growth 3Y19.84%
Revenue growth 5Y12.29%
Sales Q2Q%7.09%
3.2 Future
The Earnings Per Share is expected to grow by 10.33% on average over the next years. This is quite good.
HRI is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.04% yearly.
EPS Next Y-1.42%
EPS Next 2Y7.16%
EPS Next 3Y7.57%
EPS Next 5Y10.33%
Revenue Next Year10.18%
Revenue Next 2Y9.06%
Revenue Next 3Y9.35%
Revenue Next 5Y13.04%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
HRI is valuated correctly with a Price/Earnings ratio of 12.08.
Based on the Price/Earnings ratio, HRI is valued cheaper than 87.23% of the companies in the same industry.
HRI is valuated cheaply when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
HRI is valuated reasonably with a Price/Forward Earnings ratio of 9.65.
Based on the Price/Forward Earnings ratio, HRI is valued cheaply inside the industry as 85.11% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.76, HRI is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.08 | ||
| Fwd PE | 9.65 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, HRI is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 5.38 |
4.3 Compensation for Growth
HRI has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.25
EPS Next 2Y7.16%
EPS Next 3Y7.57%
5. Dividend
5.1 Amount
HRI has a Yearly Dividend Yield of 1.94%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.02, HRI pays a better dividend. On top of this HRI pays more dividend than 87.23% of the companies listed in the same industry.
HRI's Dividend Yield is comparable with the S&P500 average which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.94% |
5.2 History
HRI has been paying a dividend for over 5 years, so it has already some track record.
HRI has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)N/A
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
60.94% of the earnings are spent on dividend by HRI. This is not a sustainable payout ratio.
DP60.94%
EPS Next 2Y7.16%
EPS Next 3Y7.57%
142.9
-6.16 (-4.13%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners92.32%
Inst Owner Change0%
Ins Owners2.01%
Ins Owner Change3.36%
Market Cap4.07B
Analysts75.71
Price Target168.81 (18.13%)
Short Float %7.41%
Short Ratio4.21
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.94% |
Yearly Dividend2.72
Dividend Growth(5Y)N/A
DP60.94%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-26.13%
Min EPS beat(2)-42.15%
Max EPS beat(2)-10.11%
EPS beat(4)0
Avg EPS beat(4)-16.9%
Min EPS beat(4)-42.15%
Max EPS beat(4)-3.79%
EPS beat(8)1
Avg EPS beat(8)-10.72%
EPS beat(12)2
Avg EPS beat(12)-7.68%
EPS beat(16)4
Avg EPS beat(16)-4.26%
Revenue beat(2)2
Avg Revenue beat(2)1.13%
Min Revenue beat(2)0.38%
Max Revenue beat(2)1.87%
Revenue beat(4)4
Avg Revenue beat(4)1.44%
Min Revenue beat(4)0.38%
Max Revenue beat(4)2.59%
Revenue beat(8)6
Avg Revenue beat(8)0.1%
Revenue beat(12)9
Avg Revenue beat(12)0.31%
Revenue beat(16)11
Avg Revenue beat(16)0.46%
PT rev (1m)-5.5%
PT rev (3m)-19.66%
EPS NQ rev (1m)-21.5%
EPS NQ rev (3m)-25.64%
EPS NY rev (1m)-0.19%
EPS NY rev (3m)-4.17%
Revenue NQ rev (1m)10.44%
Revenue NQ rev (3m)10.09%
Revenue NY rev (1m)6.94%
Revenue NY rev (3m)5.93%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.08 | ||
| Fwd PE | 9.65 | ||
| P/S | 1.12 | ||
| P/FCF | N/A | ||
| P/OCF | 3.52 | ||
| P/B | 3 | ||
| P/tB | 36.36 | ||
| EV/EBITDA | 5.38 |
EPS(TTM)11.83
EY8.28%
EPS(NY)14.8
Fwd EY10.36%
FCF(TTM)-2.18
FCFYN/A
OCF(TTM)40.56
OCFY28.38%
SpS127.19
BVpS47.65
TBVpS3.93
PEG (NY)N/A
PEG (5Y)0.25
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.66% | ||
| ROE | 9.43% | ||
| ROCE | 10.08% | ||
| ROIC | 7.56% | ||
| ROICexc | 7.61% | ||
| ROICexgc | 9.21% | ||
| OM | 20.11% | ||
| PM (TTM) | 3.53% | ||
| GM | 60.52% | ||
| FCFM | N/A |
ROA(3y)4.38%
ROA(5y)4.04%
ROE(3y)24.04%
ROE(5y)21%
ROIC(3y)7.69%
ROIC(5y)7%
ROICexc(3y)7.77%
ROICexc(5y)7.07%
ROICexgc(3y)9.25%
ROICexgc(5y)8.36%
ROCE(3y)10.24%
ROCE(5y)9.32%
ROICexcg growth 3Y2.77%
ROICexcg growth 5Y9.04%
ROICexc growth 3Y2.21%
ROICexc growth 5Y7.51%
OM growth 3Y4.56%
OM growth 5Y10.96%
PM growth 3Y-18.21%
PM growth 5Y20%
GM growth 3Y1.25%
GM growth 5Y3.11%
F-Score4
Asset Turnover0.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.04 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 2.66 | ||
| Cap/Depr | 148.18% | ||
| Cap/Sales | 33.6% | ||
| Interest Coverage | 2.96 | ||
| Cash Conversion | 74.53% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.5 | ||
| Quick Ratio | 1.5 | ||
| Altman-Z | 1.33 |
F-Score4
WACC9.64%
ROIC/WACC0.78
Cap/Depr(3y)182.39%
Cap/Depr(5y)152.23%
Cap/Sales(3y)41.77%
Cap/Sales(5y)35.58%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-3.74%
EPS 3Y19.73%
EPS 5Y48.42%
EPS Q2Q%-44.92%
EPS Next Y-1.42%
EPS Next 2Y7.16%
EPS Next 3Y7.57%
EPS Next 5Y10.33%
Revenue 1Y (TTM)8.34%
Revenue growth 3Y19.84%
Revenue growth 5Y12.29%
Sales Q2Q%7.09%
Revenue Next Year10.18%
Revenue Next 2Y9.06%
Revenue Next 3Y9.35%
Revenue Next 5Y13.04%
EBIT growth 1Y7.21%
EBIT growth 3Y25.3%
EBIT growth 5Y24.59%
EBIT Next Year109.75%
EBIT Next 3Y32.73%
EBIT Next 5Y37.79%
FCF growth 1Y81.14%
FCF growth 3Y-46.1%
FCF growth 5YN/A
OCF growth 1Y14.6%
OCF growth 3Y18.08%
OCF growth 5Y14.02%