Head-To-Head Comparison: Vectrus (VEC) and United Rentals (URI)

Vectrus (NYSE: VEC) and United Rentals (NYSE:URI) are both business services companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, risk, institutional ownership, valuation, analyst recommendations and dividends.

Earnings & Valuation

This table compares Vectrus and United Rentals’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Vectrus $1.12 billion 0.32 $45.00 million $1.90 16.96
United Rentals $5.98 billion 2.04 $1.75 billion $7.06 20.45

United Rentals has higher revenue and earnings than Vectrus. Vectrus is trading at a lower price-to-earnings ratio than United Rentals, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Vectrus and United Rentals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vectrus 0 0 1 0 3.00
United Rentals 1 6 10 0 2.53

United Rentals has a consensus target price of $139.17, suggesting a potential downside of 3.62%. Given United Rentals’ higher probable upside, analysts plainly believe United Rentals is more favorable than Vectrus.

Institutional and Insider Ownership

85.1% of Vectrus shares are held by institutional investors. Comparatively, 93.7% of United Rentals shares are held by institutional investors. 3.9% of Vectrus shares are held by insiders. Comparatively, 1.2% of United Rentals shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Vectrus and United Rentals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vectrus 2.06% 18.96% 5.04%
United Rentals 9.64% 47.50% 6.85%

Risk and Volatility

Vectrus has a beta of 2.21, meaning that its share price is 121% more volatile than the S&P 500. Comparatively, United Rentals has a beta of 2.46, meaning that its share price is 146% more volatile than the S&P 500.

Summary

United Rentals beats Vectrus on 11 of the 14 factors compared between the two stocks.

About Vectrus

Vectrus, Inc. is a provider of services to the United States Government across the world. The Company offers services, including infrastructure asset management, logistics and supply chain management, and information technology and network communication. Its infrastructure asset management services support the United States Army, Air Force and Navy, and include infrastructure services, security, warehouse management and distribution, ammunition management, civil engineering, air base maintenance and operations, communications, emergency services, transportation, and life support activities at various global military installations. Its logistics and supply chain management services support and maintain the vehicle and equipment stocks of the United States Army and Marine Corps. Its information technology and network communication services consist of sustainment of communications systems, network security, systems installation and life cycle management of information technology systems.

About United Rentals

United Rentals, Inc. is a holding company. The Company is an equipment rental company, which operates throughout the United States and Canada. It operates through two segments: general rentals, and trench, power and pump. The general rentals segment includes the rental of construction, aerial, industrial and homeowner equipment and related services and activities. The trench, power and pump segment includes the rental of specialty construction products and related services. Its general rentals segment includes the rental of general construction and industrial equipment, such as backhoes, skid-steer loaders, forklifts and material handling equipment; aerial work platforms, such as boom lifts and scissor lifts, and general tools and light equipment, such as pressure washers, water pumps and power tools. As of January 1, 2017, it operated 887 rental locations. The Company conducts its operations through its subsidiary, United Rentals (North America), Inc. (URNA) and subsidiaries of URNA.

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