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

Localiza Rent a Car (OTCMKTS:LZRFY) is one of 158 publicly-traded companies in the “Trading Companies & Distributors” industry, but how does it contrast to its peers? We will compare Localiza Rent a Car to related companies based on the strength of its institutional ownership, dividends, analyst recommendations, risk, profitability, valuation and earnings.

Analyst Ratings

This is a summary of current recommendations and price targets for Localiza Rent a Car and its peers, as reported 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	1420	4866	6658	220	2.43

As a group, “Trading Companies & Distributors” companies have a potential upside of 11.22%. Given Localiza Rent a Car’s peers stronger consensus rating and higher possible upside, analysts plainly believe Localiza Rent a Car has less favorable growth aspects than its peers.

Insider & Institutional Ownership

50.9% of shares of all “Trading Companies & Distributors” companies are held by institutional investors. 16.9% of shares of all “Trading Companies & Distributors” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Localiza Rent a Car pays an annual dividend of $0.34 per share and has a dividend yield of 5.0%. Localiza Rent a Car pays out 56.7% of its earnings in the form of a dividend. As a group, “Trading Companies & Distributors” companies pay a dividend yield of 2.9% and pay out 36.6% of their earnings in the form of a dividend.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Localiza Rent a Car	7.43%	13.79%	4.18%
Localiza Rent a Car Competitors	0.71%	-34.50%	3.15%

Valuation and Earnings

This table compares Localiza Rent a Car and its peers top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Localiza Rent a Car	$7.48 billion	$335.90 million	11.30
Localiza Rent a Car Competitors	$6.52 billion	$365.60 million	20.96

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

Summary

Localiza Rent a Car peers beat Localiza Rent a Car on 9 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.