Taking everything into account, URI scores 5 out of 10 in our fundamental rating. URI was compared to 50 industry peers in the Trading Companies & Distributors industry. URI scores excellent on profitability, but there are concerns on its financial health. URI has a correct valuation and a medium growth rate.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

URI had positive earnings in the past year.
URI had a positive operating cash flow in the past year.
In the past 5 years URI has always been profitable.
Each year in the past 5 years URI had a positive operating cash flow.

1.2 Ratios

URI has a better Return On Assets (8.42%) than 78.00% of its industry peers.
The Return On Equity of URI (28.11%) is better than 88.00% of its industry peers.
URI's Return On Invested Capital of 11.75% is fine compared to the rest of the industry. URI outperforms 80.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for URI is above the industry average of 9.64%.

		Industry Rank	Sector Rank
ROA	8.42%
ROE	28.11%
ROIC	11.75%

ROA(3y)9.11%

ROA(5y)7.83%

ROE(3y)29.83%

ROE(5y)26.44%

ROIC(3y)12.29%

ROIC(5y)11.04%

1.3 Margins

With an excellent Profit Margin value of 15.83%, URI belongs to the best of the industry, outperforming 86.00% of the companies in the same industry.
In the last couple of years the Profit Margin of URI has grown nicely.
URI has a better Operating Margin (25.08%) than 86.00% of its industry peers.
In the last couple of years the Operating Margin of URI has grown nicely.
With a decent Gross Margin value of 38.73%, URI is doing good in the industry, outperforming 72.00% of the companies in the same industry.
URI's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	25.08%
PM (TTM)	15.83%
GM	38.73%

OM growth 3Y4.11%

OM growth 5Y2.83%

PM growth 3Y5.56%

PM growth 5Y5.97%

GM growth 3Y0.35%

GM growth 5Y0.42%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), URI is creating some value.
The number of shares outstanding for URI has been reduced compared to 1 year ago.
Compared to 5 years ago, URI has less shares outstanding
URI has a worse debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 3.35 indicates that URI is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.35, URI is in line with its industry, outperforming 54.00% of the companies in the same industry.
URI has a debt to FCF ratio of 31.44. This is a negative value and a sign of low solvency as URI would need 31.44 years to pay back of all of its debts.
URI has a Debt to FCF ratio (31.44) which is comparable to the rest of the industry.
URI has a Debt/Equity ratio of 1.40. This is a high value indicating a heavy dependency on external financing.
URI has a Debt to Equity ratio of 1.40. This is in the lower half of the industry: URI underperforms 70.00% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	1.4
Debt/FCF	31.44
Altman-Z	3.35

ROIC/WACC1.23

WACC9.54%

2.3 Liquidity

A Current Ratio of 0.90 indicates that URI may have some problems paying its short term obligations.
The Current ratio of URI (0.90) is worse than 88.00% of its industry peers.
URI has a Quick Ratio of 0.90. This is a bad value and indicates that URI is not financially healthy enough and could expect problems in meeting its short term obligations.
URI's Quick ratio of 0.84 is on the low side compared to the rest of the industry. URI is outperformed by 68.00% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	0.9
Quick Ratio	0.84

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

The earnings per share for URI have decreased by -0.68% in the last year.
URI shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 17.13% yearly.
URI shows a small growth in Revenue. In the last year, the Revenue has grown by 6.73%.
Measured over the past years, URI shows a quite strong growth in Revenue. The Revenue has been growing by 10.41% on average per year.

EPS 1Y (TTM)-0.68%

EPS 3Y25.11%

EPS 5Y17.13%

EPS Q2Q%-0.85%

Revenue 1Y (TTM)6.73%

Revenue growth 3Y16.46%

Revenue growth 5Y10.41%

Sales Q2Q%5.94%

3.2 Future

Based on estimates for the next years, URI will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.38% on average per year.
URI is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.15% yearly.

EPS Next Y-1.29%

EPS Next 2Y4.62%

EPS Next 3Y7.51%

EPS Next 5Y11.38%

Revenue Next Year6.17%

Revenue Next 2Y6.1%

Revenue Next 3Y6.37%

Revenue Next 5Y8.15%

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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

URI is valuated rather expensively with a Price/Earnings ratio of 21.56.
Based on the Price/Earnings ratio, URI is valued a bit cheaper than the industry average as 66.00% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.21, URI is valued a bit cheaper.
With a Price/Forward Earnings ratio of 19.42, URI is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of URI indicates a somewhat cheap valuation: URI is cheaper than 64.00% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 25.98. URI is valued slightly cheaper when compared to this.

		Industry Rank	Sector Rank
PE	21.56
Fwd PE	19.42

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, URI is valued a bit cheaper than 72.00% of the companies in the same industry.
URI's Price/Free Cash Flow ratio is in line with the industry average.

		Industry Rank	Sector Rank
P/FCF	131.4
EV/EBITDA	10.29

4.3 Compensation for Growth

The excellent profitability rating of URI may justify a higher PE ratio.

PEG (NY)N/A

PEG (5Y)1.26

EPS Next 2Y4.62%

EPS Next 3Y7.51%

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5. Dividend

5.1 Amount

With a yearly dividend of 0.75%, URI is not a good candidate for dividend investing.
URI's Dividend Yield is comparable with the industry average which is at 1.31.
Compared to an average S&P500 Dividend Yield of 1.81, URI's dividend is way lower than the S&P500 average.

		Industry Rank	Sector Rank
Dividend Yield	0.75%

5.2 History

URI has paid a dividend for less than 5 years, so there is no long track record yet.

Dividend Growth(5Y)N/A

Div Incr Years1

Div Non Decr Years1

5.3 Sustainability

18.10% of the earnings are spent on dividend by URI. This is a low number and sustainable payout ratio.

DP18.1%

EPS Next 2Y4.62%

EPS Next 3Y7.51%

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UNITED RENTALS INC / URI FAQ

What is the ChartMill fundamental rating of UNITED RENTALS INC (URI) stock?

ChartMill assigns a fundamental rating of 5 / 10 to URI.

Can you provide the valuation status for UNITED RENTALS INC?

ChartMill assigns a valuation rating of 4 / 10 to UNITED RENTALS INC (URI). This can be considered as Fairly Valued.

What is the profitability of URI stock?

UNITED RENTALS INC (URI) has a profitability rating of 8 / 10.

Can you provide the PE and PB ratios for URI stock?

The Price/Earnings (PE) ratio for UNITED RENTALS INC (URI) is 21.56 and the Price/Book (PB) ratio is 6.57.

Is the dividend of UNITED RENTALS INC sustainable?

The dividend rating of UNITED RENTALS INC (URI) is 2 / 10 and the dividend payout ratio is 18.1%.