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MCGRATH RENTCORP (MGRC) Stock Fundamental Analysis

NASDAQ:MGRC - Nasdaq - US5805891091 - Common Stock - Currency: USD

127.18  -1.78 (-1.38%)

After market: 127.18 0 (0%)

Fundamental Rating

4

We assign a fundamental rating of 4 out of 10 to MGRC. MGRC was compared to 48 industry peers in the Trading Companies & Distributors industry. MGRC has an excellent profitability rating, but there are concerns on its financial health. MGRC does not seem to be growing, but still is valued expensively.


Dividend Valuation Growth Profitability Health

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7

1. Profitability

1.1 Basic Checks

In the past year MGRC was profitable.
MGRC had a positive operating cash flow in the past year.
Of the past 5 years MGRC 4 years were profitable.
MGRC had a positive operating cash flow in 4 of the past 5 years.
MGRC Yearly Net Income VS EBIT VS OCF VS FCFMGRC Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 100M -100M

1.2 Ratios

MGRC has a better Return On Assets (9.84%) than 79.17% of its industry peers.
MGRC has a Return On Equity of 20.55%. This is amongst the best in the industry. MGRC outperforms 83.33% of its industry peers.
MGRC has a Return On Invested Capital (7.43%) which is in line with its industry peers.
The Average Return On Invested Capital over the past 3 years for MGRC is below the industry average of 9.88%.
The last Return On Invested Capital (7.43%) for MGRC is above the 3 year average (7.42%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 9.84%
ROE 20.55%
ROIC 7.43%
ROA(3y)6.75%
ROA(5y)7.12%
ROE(3y)15.09%
ROE(5y)15.1%
ROIC(3y)7.42%
ROIC(5y)8.13%
MGRC Yearly ROA, ROE, ROICMGRC Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 5 10 15 20 25

1.3 Margins

MGRC has a Profit Margin of 25.29%. This is amongst the best in the industry. MGRC outperforms 97.92% of its industry peers.
In the last couple of years the Profit Margin of MGRC has grown nicely.
MGRC has a better Operating Margin (23.15%) than 89.58% of its industry peers.
In the last couple of years the Operating Margin of MGRC has remained more or less at the same level.
MGRC has a better Gross Margin (48.47%) than 81.25% of its industry peers.
In the last couple of years the Gross Margin of MGRC has remained more or less at the same level.
Industry RankSector Rank
OM 23.15%
PM (TTM) 25.29%
GM 48.47%
OM growth 3Y-3.1%
OM growth 5Y-1.05%
PM growth 3Y5.63%
PM growth 5Y5.67%
GM growth 3Y0.91%
GM growth 5Y0.21%
MGRC Yearly Profit, Operating, Gross MarginsMGRC Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 10 20 30 40

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3

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), MGRC is destroying value.
There is no outstanding debt for MGRC. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
MGRC Yearly Shares OutstandingMGRC Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 5M 10M 15M 20M
MGRC Yearly Total Debt VS Total AssetsMGRC Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B

2.2 Solvency

MGRC has an Altman-Z score of 2.93. This is not the best score and indicates that MGRC is in the grey zone with still only limited risk for bankruptcy at the moment.
MGRC has a Altman-Z score of 2.93. This is comparable to the rest of the industry: MGRC outperforms 54.17% of its industry peers.
The Debt to FCF ratio of MGRC is 24.51, which is on the high side as it means it would take MGRC, 24.51 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of MGRC (24.51) is comparable to the rest of the industry.
MGRC has a Debt/Equity ratio of 0.56. This is a neutral value indicating MGRC is somewhat dependend on debt financing.
MGRC has a Debt to Equity ratio of 0.56. This is comparable to the rest of the industry: MGRC outperforms 56.25% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.56
Debt/FCF 24.51
Altman-Z 2.93
ROIC/WACC0.7
WACC10.68%
MGRC Yearly LT Debt VS Equity VS FCFMGRC Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 200M 400M 600M 800M

2.3 Liquidity

MGRC has a Current Ratio of 1.71. This is a normal value and indicates that MGRC is financially healthy and should not expect problems in meeting its short term obligations.
MGRC has a worse Current ratio (1.71) than 60.42% of its industry peers.
A Quick Ratio of 1.59 indicates that MGRC should not have too much problems paying its short term obligations.
MGRC's Quick ratio of 1.59 is fine compared to the rest of the industry. MGRC outperforms 68.75% of its industry peers.
Industry RankSector Rank
Current Ratio 1.71
Quick Ratio 1.59
MGRC Yearly Current Assets VS Current LiabilitesMGRC Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 100M 200M 300M

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3

3. Growth

3.1 Past

MGRC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.77%, which is quite good.
MGRC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.21% yearly.
EPS 1Y (TTM)9.77%
EPS 3Y8.9%
EPS 5Y4.21%
EPS Q2Q%21.54%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%10%

3.2 Future

Based on estimates for the next years, MGRC will show a quite strong growth in Earnings Per Share. The EPS will grow by 18.89% on average per year.
Based on estimates for the next years, MGRC will show a small growth in Revenue. The Revenue will grow by 3.39% on average per year.
EPS Next Y25.72%
EPS Next 2Y18.89%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year1.26%
Revenue Next 2Y3.39%
Revenue Next 3YN/A
Revenue Next 5YN/A

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
MGRC Yearly Revenue VS EstimatesMGRC Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 200M 400M 600M 800M
MGRC Yearly EPS VS EstimatesMGRC Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2 4 6

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3

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 26.33, the valuation of MGRC can be described as expensive.
Based on the Price/Earnings ratio, MGRC is valued a bit more expensive than the industry average as 64.58% of the companies are valued more cheaply.
MGRC is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 29.62, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 20.94 indicates a rather expensive valuation of MGRC.
The rest of the industry has a similar Price/Forward Earnings ratio as MGRC.
MGRC's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.70.
Industry RankSector Rank
PE 26.33
Fwd PE 20.94
MGRC Price Earnings VS Forward Price EarningsMGRC Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MGRC is on the same level as its industry peers.
MGRC's Price/Free Cash Flow ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 125.74
EV/EBITDA 11.86
MGRC Per share dataMGRC EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30 40

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
MGRC has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as MGRC's earnings are expected to grow with 18.89% in the coming years.
PEG (NY)1.02
PEG (5Y)6.25
EPS Next 2Y18.89%
EPS Next 3YN/A

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5

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 1.50%, MGRC has a reasonable but not impressive dividend return.
MGRC's Dividend Yield is a higher than the industry average which is at 1.90.
Compared to the average S&P500 Dividend Yield of 2.27, MGRC is paying slightly less dividend.
Industry RankSector Rank
Dividend Yield 1.5%

5.2 History

The dividend of MGRC is nicely growing with an annual growth rate of 7.81%!
MGRC has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of MGRC decreased recently.
Dividend Growth(5Y)7.81%
Div Incr Years1
Div Non Decr Years1
MGRC Yearly Dividends per shareMGRC Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.5 1 1.5 2

5.3 Sustainability

20.66% of the earnings are spent on dividend by MGRC. This is a low number and sustainable payout ratio.
The dividend of MGRC is growing, but earnings are growing more, so the dividend growth is sustainable.
DP20.66%
EPS Next 2Y18.89%
EPS Next 3YN/A
MGRC Yearly Income VS Free CF VS DividendMGRC Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 100M -100M
MGRC Dividend Payout.MGRC Dividend Payout, showing the Payout Ratio.MGRC Dividend Payout.PayoutRetained Earnings

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MCGRATH RENTCORP

NASDAQ:MGRC (2/21/2025, 8:00:01 PM)

After market: 127.18 0 (0%)

127.18

-1.78 (-1.38%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)02-19 2025-02-19/amc
Earnings (Next)04-23 2025-04-23/amc
Inst Owners89.08%
Inst Owner Change-91.86%
Ins Owners1.31%
Ins Owner Change-8.36%
Market Cap3.12B
Analysts85
Price Target143.48 (12.82%)
Short Float %2.2%
Short Ratio4.08
Dividend
Industry RankSector Rank
Dividend Yield 1.5%
Yearly Dividend1.86
Dividend Growth(5Y)7.81%
DP20.66%
Div Incr Years1
Div Non Decr Years1
Ex-Date01-17 2025-01-17 (0.475)
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-43.09%
Min EPS beat(2)-52.07%
Max EPS beat(2)-34.12%
EPS beat(4)0
Avg EPS beat(4)-30.07%
Min EPS beat(4)-52.07%
Max EPS beat(4)-6.63%
EPS beat(8)3
Avg EPS beat(8)-15.03%
EPS beat(12)6
Avg EPS beat(12)-7.85%
EPS beat(16)7
Avg EPS beat(16)-6.83%
Revenue beat(2)1
Avg Revenue beat(2)6.99%
Min Revenue beat(2)-0.85%
Max Revenue beat(2)14.83%
Revenue beat(4)3
Avg Revenue beat(4)5.58%
Min Revenue beat(4)-0.85%
Max Revenue beat(4)14.83%
Revenue beat(8)7
Avg Revenue beat(8)4.99%
Revenue beat(12)7
Avg Revenue beat(12)0.28%
Revenue beat(16)9
Avg Revenue beat(16)0.08%
PT rev (1m)0%
PT rev (3m)12.09%
EPS NQ rev (1m)-0.89%
EPS NQ rev (3m)-0.89%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0.01%
Revenue NQ rev (3m)0.01%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0%
Valuation
Industry RankSector Rank
PE 26.33
Fwd PE 20.94
P/S 3.51
P/FCF 125.74
P/OCF 9.94
P/B 2.85
P/tB 4.37
EV/EBITDA 11.86
EPS(TTM)4.83
EY3.8%
EPS(NY)6.07
Fwd EY4.77%
FCF(TTM)1.01
FCFY0.8%
OCF(TTM)12.79
OCFY10.06%
SpS36.2
BVpS44.56
TBVpS29.08
PEG (NY)1.02
PEG (5Y)6.25
Profitability
Industry RankSector Rank
ROA 9.84%
ROE 20.55%
ROCE 9.8%
ROIC 7.43%
ROICexc 7.44%
ROICexgc 9.09%
OM 23.15%
PM (TTM) 25.29%
GM 48.47%
FCFM 2.79%
ROA(3y)6.75%
ROA(5y)7.12%
ROE(3y)15.09%
ROE(5y)15.1%
ROIC(3y)7.42%
ROIC(5y)8.13%
ROICexc(3y)7.43%
ROICexc(5y)8.14%
ROICexgc(3y)8.66%
ROICexgc(5y)9%
ROCE(3y)9.8%
ROCE(5y)10.73%
ROICexcg growth 3Y-4.61%
ROICexcg growth 5Y0.77%
ROICexc growth 3Y-10.1%
ROICexc growth 5Y-2.76%
OM growth 3Y-3.1%
OM growth 5Y-1.05%
PM growth 3Y5.63%
PM growth 5Y5.67%
GM growth 3Y0.91%
GM growth 5Y0.21%
F-Score8
Asset Turnover0.39
Health
Industry RankSector Rank
Debt/Equity 0.56
Debt/FCF 24.51
Debt/EBITDA 1.94
Cap/Depr 266.8%
Cap/Sales 32.54%
Interest Coverage 4.02
Cash Conversion 99.95%
Profit Quality 11.05%
Current Ratio 1.71
Quick Ratio 1.59
Altman-Z 2.93
F-Score8
WACC10.68%
ROIC/WACC0.7
Cap/Depr(3y)182.16%
Cap/Depr(5y)170.64%
Cap/Sales(3y)26.74%
Cap/Sales(5y)25.85%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)9.77%
EPS 3Y8.9%
EPS 5Y4.21%
EPS Q2Q%21.54%
EPS Next Y25.72%
EPS Next 2Y18.89%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%10%
Revenue Next Year1.26%
Revenue Next 2Y3.39%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y10.46%
EBIT growth 3Y9.74%
EBIT growth 5Y9.63%
EBIT Next Year75.39%
EBIT Next 3Y24.5%
EBIT Next 5YN/A
FCF growth 1Y4.78%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y62.97%
OCF growth 3Y-19.16%
OCF growth 5Y-7.75%