United Rentals (NYSE:URI) and Upbound Group (NASDAQ:UPBD) Financial Analysis

Upbound Group (NASDAQ:UPBD – Get Rating) and United Rentals (NYSE:URI – Get Rating) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, analyst recommendations and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Upbound Group	0.29%	40.50%	7.88%
United Rentals	18.08%	36.12%	10.66%

Dividends

Upbound Group pays an annual dividend of $1.36 per share and has a dividend yield of 5.9%. United Rentals pays an annual dividend of $1.48 per share and has a dividend yield of 0.4%. Upbound Group pays out 680.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. United Rentals pays out 5.0% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Upbound Group and United Rentals’ revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Upbound Group	$4.25 billion	0.30	$12.36 million	$0.20	115.20
United Rentals	$11.64 billion	2.20	$2.11 billion	$29.76	12.44

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

Risk & Volatility

Upbound Group has a beta of 1.75, indicating that its stock price is 75% more volatile than the S&P 500. Comparatively, United Rentals has a beta of 1.85, indicating that its stock price is 85% more volatile than the S&P 500.

Institutional & Insider Ownership

86.1% of Upbound Group shares are held by institutional investors. Comparatively, 89.7% of United Rentals shares are held by institutional investors. 11.0% of Upbound Group shares are held by company insiders. Comparatively, 0.5% of United Rentals shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations and price targets for Upbound Group and United Rentals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Upbound Group	0	1	0	0	2.00
United Rentals	2	2	7	0	2.45

United Rentals has a consensus target price of $440.46, suggesting a potential upside of 19.01%. Given United Rentals’ stronger consensus rating and higher possible upside, analysts plainly believe United Rentals is more favorable than Upbound Group.

Summary

United Rentals beats Upbound Group on 12 of the 16 factors compared between the two stocks.

About Upbound Group

(Get Rating)

Upbound Group, Inc. engages in the provision of furniture, electronics, appliances, computers, and smartphones through flexible rental purchase agreements. It operates through the following segments: Rent-A-Center Business, Preferred Lease, Mexico, and Franchising. The Rent-A-Center Business segment consists of company-owned rent-to-own stores in the United States and Puerto Rico. The Preferred Lease segment offers an on-site rent-to-own option at a third-party retailer’s location. The Mexico segment consists of its company-owned rent-to-own stores in Mexico. The Franchising segment sells rental merchandise to its franchisees. The company was founded by Mark E. Speese on September 16, 1986 and is headquartered in Plano, TX.

About United Rentals

(Get Rating)

United Rentals, Inc. engages in the equipment rental business. It operates through the General Rentals and Specialty segments. The General Rentals segment includes the rental of construction, aerial and industrial equipment, general tools and light equipment, and related services and activities. The Specialty segment focuses on the rental of specialty construction products such as trench safety equipment, power and HVAC equipment, fluid solutions equipment, mobile storage equipment and modular office space. The company was founded by Bradley S. Jacobs in 1997 and is headquartered in Stamford, CT.