Overall URI gets a fundamental rating of 4 out of 10. We evaluated URI against 50 industry peers in the Trading Companies & Distributors industry. While URI belongs to the best of the industry regarding profitability, there are concerns on its financial health. URI has a valuation in line with the averages, but it does not seem to be growing.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year URI was profitable.
URI had a positive operating cash flow in the past year.
URI had positive earnings in 4 of the past 5 years.
URI had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

URI has a better Return On Assets (8.42%) than 78.00% of its industry peers.
URI has a Return On Equity of 28.11%. This is amongst the best in the industry. URI outperforms 88.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 11.75%, URI is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
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

URI has a better Profit Margin (15.83%) than 86.00% of its industry peers.
URI's Profit Margin has improved in the last couple of years.
The Operating Margin of URI (25.08%) is better than 86.00% of its industry peers.
URI's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 38.73%, URI is in the better half of the industry, outperforming 72.00% of the companies in the same industry.
In the last couple of years the Gross Margin of URI has remained more or less at the same level.

		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

URI has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
URI has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.

2.2 Solvency

URI has an Altman-Z score of 3.10. This indicates that URI is financially healthy and has little risk of bankruptcy at the moment.
URI has a Altman-Z score (3.10) which is in line with its industry peers.
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.
Looking at the Debt to FCF ratio, with a value of 31.44, URI is in line with its industry, outperforming 50.00% of the companies in the same industry.
URI has a Debt/Equity ratio of 1.40. This is a high value indicating a heavy dependency on external financing.
URI's Debt to Equity ratio of 1.40 is on the low side compared to the rest of the industry. URI is outperformed by 70.00% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	1.4
Debt/FCF	31.44
Altman-Z	3.1

ROIC/WACC1.22

WACC9.62%

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.
A Quick Ratio of 0.84 indicates that URI may have some problems paying its short term obligations.
The Quick ratio of URI (0.84) is worse than 70.00% 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 -2.59% 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 19.24% yearly.

EPS 1Y (TTM)-2.59%

EPS 3Y8.92%

EPS 5Y19.24%

EPS Q2Q%-4.31%

Revenue 1Y (TTM)N/A

Revenue growth 3YN/A

Revenue growth 5YN/A

Sales Q2Q%2.76%

3.2 Future

URI is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 15.17% yearly.
The Revenue is expected to grow by 8.66% on average over the next years. This is quite good.

EPS Next Y12.35%

EPS Next 2Y12.95%

EPS Next 3Y15.75%

EPS Next 5Y15.17%

Revenue Next Year6.03%

Revenue Next 2Y6.47%

Revenue Next 3Y7.61%

Revenue Next 5Y8.66%

3.3 Evolution

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 18.49, the valuation of URI can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of URI indicates a somewhat cheap valuation: URI is cheaper than 72.00% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.41, URI is valued a bit cheaper.
With a Price/Forward Earnings ratio of 16.46, URI is valued correctly.
Compared to the rest of the industry, the Price/Forward Earnings ratio of URI indicates a somewhat cheap valuation: URI is cheaper than 74.00% of the companies listed in the same industry.
URI's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.64.

		Industry Rank	Sector Rank
PE	18.49
Fwd PE	16.46

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, URI is valued a bit cheaper than 76.00% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of URI is on the same level as its industry peers.

		Industry Rank	Sector Rank
P/FCF	111.38
EV/EBITDA	9.04

4.3 Compensation for Growth

URI's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
URI has a very decent profitability rating, which may justify a higher PE ratio.
URI's earnings are expected to grow with 15.75% in the coming years. This may justify a more expensive valuation.

PEG (NY)1.5

PEG (5Y)0.96

EPS Next 2Y12.95%

EPS Next 3Y15.75%

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5. Dividend

5.1 Amount

With a yearly dividend of 0.94%, URI is not a good candidate for dividend investing.
URI's Dividend Yield is a higher than the industry average which is at 0.88.
With a Dividend Yield of 0.94, URI pays less dividend than the S&P500 average, which is at 1.83.

		Industry Rank	Sector Rank
Dividend Yield	0.94%

5.2 History

URI has been paying a dividend for less than 5 years, so it still needs to build a track record.

Dividend Growth(5Y)N/A

Div Incr Years1

Div Non Decr Years1

5.3 Sustainability

URI pays out 18.10% of its income as dividend. This is a sustainable payout ratio.

DP18.1%

EPS Next 2Y12.95%

EPS Next 3Y15.75%

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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 4 / 10 to URI.

Can you provide the valuation status for UNITED RENTALS INC?

ChartMill assigns a valuation rating of 5 / 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 7 / 10.

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

The Price/Earnings (PE) ratio for UNITED RENTALS INC (URI) is 18.49 and the Price/Book (PB) ratio is 5.57.

Is the dividend of UNITED RENTALS INC sustainable?

The dividend rating of UNITED RENTALS INC (URI) is 3 / 10 and the dividend payout ratio is 18.1%.