Critical Analysis: Localiza Rent a Car (LZRFY) & Its Peers

Localiza Rent a Car (OTCMKTS:LZRFY) is one of 159 public companies in the “Trading Companies & Distributors” industry, but how does it weigh in compared to its competitors? We will compare Localiza Rent a Car to similar companies based on the strength of its valuation, dividends, profitability, analyst recommendations, institutional ownership, risk and earnings.

Insider and Institutional Ownership

50.9% of shares of all “Trading Companies & Distributors” companies are owned by institutional investors. 16.7% of shares of all “Trading Companies & Distributors” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings for Localiza Rent a Car and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Localiza Rent a Car	1	0	0	0	1.00
Localiza Rent a Car Competitors	1410	4871	6701	229	2.44

As a group, “Trading Companies & Distributors” companies have a potential upside of 5.15%. Given Localiza Rent a Car’s competitors stronger consensus rating and higher probable upside, analysts plainly believe Localiza Rent a Car has less favorable growth aspects than its competitors.

Profitability

This table compares Localiza Rent a Car and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Localiza Rent a Car	5.24%	9.08%	2.77%
Localiza Rent a Car Competitors	2.92%	-34.03%	3.55%

Valuation and Earnings

This table compares Localiza Rent a Car and its competitors revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Localiza Rent a Car	$7.48 billion	$335.90 million	16.38
Localiza Rent a Car Competitors	$6.43 billion	$364.19 million	24.94

Localiza Rent a Car has higher revenue, but lower earnings than its competitors. Localiza Rent a Car is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Dividends

Localiza Rent a Car pays an annual dividend of $0.34 per share and has a dividend yield of 5.3%. Localiza Rent a Car pays out 87.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Trading Companies & Distributors” companies pay a dividend yield of 2.9% and pay out 36.5% of their earnings in the form of a dividend.

Summary

Localiza Rent a Car competitors beat Localiza Rent a Car on 10 of the 14 factors compared.

Localiza Rent a Car Company Profile

Localiza Rent a Car S.A. engages in car and fleet rental business. The company is also involved in granting franchises; sale of decommissioned and used cars; provision of sundry automotive, and travel and tourism services; and managing claims for insurance companies, as well as provision of tracking and telemetry services. It operates car rental agencies in Brazil, Argentina, Colombia, Ecuador, and Paraguay. The company serves individuals and legal entities. Localiza Rent a Car S.A. was founded in 1973 and is headquartered in Belo Horizonte, Brazil.