Financial Comparison: McGrath RentCorp (MGRC) versus General Finance (GFN)
McGrath RentCorp (NASDAQ: MGRC) and General Finance (NASDAQ:GFN) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, valuation, earnings, risk and analyst recommendations.
This table compares McGrath RentCorp and General Finance’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent ratings and recommmendations for McGrath RentCorp and General Finance, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
General Finance has a consensus target price of $13.00, indicating a potential upside of 22.07%. Given General Finance’s stronger consensus rating and higher probable upside, analysts plainly believe General Finance is more favorable than McGrath RentCorp.
McGrath RentCorp pays an annual dividend of $1.36 per share and has a dividend yield of 2.1%. General Finance does not pay a dividend. McGrath RentCorp pays out 63.6% of its earnings in the form of a dividend. McGrath RentCorp has increased its dividend for 16 consecutive years.
Earnings and Valuation
This table compares McGrath RentCorp and General Finance’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|McGrath RentCorp||$462.03 million||3.33||$153.92 million||$2.14||29.82|
|General Finance||$276.93 million||1.03||-$2.96 million||($0.25)||-42.60|
McGrath RentCorp has higher revenue and earnings than General Finance. General Finance is trading at a lower price-to-earnings ratio than McGrath RentCorp, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
83.9% of McGrath RentCorp shares are held by institutional investors. Comparatively, 20.6% of General Finance shares are held by institutional investors. 4.6% of McGrath RentCorp shares are held by insiders. Comparatively, 25.9% of General Finance shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Risk and Volatility
McGrath RentCorp has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500. Comparatively, General Finance has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500.
McGrath RentCorp beats General Finance on 11 of the 17 factors compared between the two stocks.
About McGrath RentCorp
McGrath RentCorp, a business to business rental company, rents and sells relocatable modular buildings, portable storage containers, electronic test equipment, and liquid and solid containment tanks and boxes in the United States and internationally. It operates through four segments: Mobile Modular, TRS-RenTelco, Adler Tanks, and Enviroplex. The Mobile Modular segment rents and sells modular buildings designed for use as classrooms, temporary offices adjacent to existing facilities, sales offices, construction field offices, restroom buildings, health care clinics, child care facilities, office spaces, and various other purposes; and portable storage containers. The TRS-RenTelco segment rents and sells general purpose electronic test equipment, such as oscilloscopes, amplifiers, analyzers, signal source, and power source test equipment primarily to aerospace, defense, electronics, industrial, research, and semiconductor industries. This segment also provides communications test equipment comprising network and transmission test equipment for various fiber, copper, and wireless networks to the manufacturers of communications equipment and products, electrical and communications installation contractors, field technicians, and service providers. The Adler Tanks segment rents fixed axle steel tanks for storing groundwater, wastewater, volatile organic liquids, sewage, slurry and bio sludge, oil and water mixtures, and chemicals; vacuum containers for sludge and solid materials; dewatering boxes for the separation of water contained in sludge and slurry; and roll-off and trash boxes for temporary storage and transportation of solid waste. The Enviroplex segment manufactures and sells modular and portable classrooms directly to public school districts and other educational institutions in California. McGrath RentCorp was founded in 1979 and is headquartered in Livermore, California.
About General Finance
General Finance Corporation, a specialty rental services company, provides portable storage, modular space, and liquid containment solutions in North America and the Asia-Pacific regions. Its portable storage products include storage containers used in classroom equipment storage, construction equipment and tool storage, disaster shelters, landscaping sheds, recreational equipment storage, and retail inventory storage applications; and freight containers used in freight transportation by road and rail. The company's modular space products comprise office container products, modular buildings, and mobile offices used in various applications, such as general administrative office space, military installations, workforce living accommodations, bank branches, classrooms/education, construction offices, daycare facilities, dormitories, healthcare facilities, rental facilities, retail space, and shelters. Its liquid containment products consists of portable liquid storage tanks for well-site liquid containment needs, expansion/upgrade projects, highway construction/groundwater sewage, infrastructure projects, industrial projects, mining pit pump works, municipal sewer and water projects, non-residential construction projects, pipeline construction and maintenance, and refinery turnaround applications. The company provides ancillary products, such as steps, ramps, furniture, portable toilets, security systems, shelving, mud pumps, hoses, splitter valves, tee connectors, and other items used in connection with leased equipment. It also manufactures various steel-based products, such as chassis, storm shelters, blast-resistant modules, and specialty tanks. General Finance Corporation serves commercial, construction, transportation, industrial, energy, manufacturing, mining, retail, and education industries, as well as government clients. The company was founded in 2005 and is headquartered in Pasadena, California.
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