Critical Review: United Rentals (NYSE:URI) and Doman Building Materials Group (OTCMKTS:CWXZF)

United Rentals (NYSE:URI) and Doman Building Materials Group (OTCMKTS:CWXZF) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Valuation & Earnings

This table compares United Rentals and Doman Building Materials Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Rentals	$16.10 billion	4.43	$2.49 billion	$41.64	27.51
Doman Building Materials Group	N/A	N/A	N/A	$0.43	19.59

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

Dividends

United Rentals pays an annual dividend of $7.88 per share and has a dividend yield of 0.7%. Doman Building Materials Group pays an annual dividend of $0.42 per share and has a dividend yield of 5.0%. United Rentals pays out 18.9% of its earnings in the form of a dividend. Doman Building Materials Group pays out 98.7% 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 has increased its dividend for 3 consecutive years.

Profitability

This table compares United Rentals and Doman Building Materials Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Rentals	15.67%	31.72%	9.47%
Doman Building Materials Group	N/A	N/A	N/A

Analyst Ratings

This is a summary of current recommendations and price targets for United Rentals and Doman Building Materials Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Rentals	1	0	16	1	2.94
Doman Building Materials Group	0	1	1	0	2.50

United Rentals presently has a consensus target price of $1,246.19, suggesting a potential upside of 8.77%. Given United Rentals’ stronger consensus rating and higher probable upside, analysts plainly believe United Rentals is more favorable than Doman Building Materials Group.

Institutional and Insider Ownership

96.3% of United Rentals shares are owned by institutional investors. Comparatively, 21.8% of Doman Building Materials Group shares are owned by institutional investors. 0.5% of United Rentals shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

United Rentals beats Doman Building Materials Group on 14 of the 15 factors compared between the two stocks.

About United Rentals

United Rentals, Inc., through its subsidiaries, operates as an equipment rental company. It operates in two segments, General Rentals and Specialty. The General Rentals segment rents general construction and industrial equipment includes backhoes, skid-steer loaders, forklifts, earthmoving equipment, and material handling equipment; aerial work platforms, such as boom and scissor lifts; and general tools and light equipment comprising pressure washers, water pumps, and power tools for construction and industrial companies, manufacturers, utilities, municipalities, homeowners, and government entities. The specialty segment rents specialty construction products, including trench safety equipment consists of trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers, and line testing equipment for underground work; power and heating, ventilating, and air conditioning equipment, such as portable diesel generators, electrical distribution equipment, and temperature control equipment; fluid solutions equipment for fluid containment, transfer, and treatment; and mobile storage equipment and modular office space. This segment serves construction companies involved in infrastructure projects, and municipalities and industrial companies. It also sells aerial lifts, reach forklifts, telehandlers, compressors, and generators; construction consumables, tools, small equipment, and safety supplies; and parts for equipment that is owned by its customers, as well as provides repair and maintenance services. The company sells used equipment through its sales force, brokers, website, at auctions, and directly to manufacturers. The company operates in the United States, Canada, Europe, Australia, and New Zealand. United Rentals, Inc. was incorporated in 1997 and is headquartered in Stamford, Connecticut.

About Doman Building Materials Group

Doman Building Materials Group Ltd., through its subsidiaries, engages in the wholesale distribution of building materials and home renovation products in the United States and Canada. The company offers treated wood; siding and trim; decking and aluminum railing; engineered wood products; roofing products; insulation and wrap products; and lumber and plywood products. It is also involved in agricultural post-peeling and pressure treating activities, as well as timber ownership and management of private timberlands and forest licenses; and provides other value-add services. In addition, the company distributes lumber products. It sells its products to small independent lumber yards, regional building material dealers, home improvement chains, and retailers. The company serves its products to new home construction, home renovation, and industrial markets. The company was formerly known as CanWel Building Materials Group Ltd. and changed its name to Doman Building Materials Group Ltd. in May 2021. Doman Building Materials Group Ltd. was founded in 1989 and is headquartered in Vancouver, Canada.