Head-To-Head Analysis: Herc (NYSE:HRI) & Ryerson (NYSE:RYZ)

Herc (NYSE:HRI) and Ryerson (NYSE:RYZ) are both industrials companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, risk, earnings, profitability, analyst recommendations, dividends and valuation.

Dividends

Herc pays an annual dividend of $2.80 per share and has a dividend yield of 2.1%. Ryerson pays an annual dividend of $0.75 per share and has a dividend yield of 3.1%. Herc pays out 190.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ryerson pays out -60.5% of its earnings in the form of a dividend. Herc has raised its dividend for 2 consecutive years. Ryerson is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Herc and Ryerson’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Herc	1.01%	10.33%	1.44%
Ryerson	-0.56%	-0.62%	-0.21%

Analyst Recommendations

This is a summary of recent ratings for Herc and Ryerson, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Herc	0	2	6	1	2.89
Ryerson	1	2	0	0	1.67

Herc presently has a consensus target price of $184.43, suggesting a potential upside of 39.50%. Given Herc’s stronger consensus rating and higher probable upside, analysts plainly believe Herc is more favorable than Ryerson.

Volatility & Risk

Herc has a beta of 2.04, suggesting that its share price is 104% more volatile than the S&P 500. Comparatively, Ryerson has a beta of 1.59, suggesting that its share price is 59% more volatile than the S&P 500.

Insider & Institutional Ownership

93.1% of Herc shares are held by institutional investors. Comparatively, 94.8% of Ryerson shares are held by institutional investors. 2.2% of Herc shares are held by insiders. Comparatively, 6.6% of Ryerson shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Herc and Ryerson”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Herc	$4.38 billion	1.01	$1.00 million	$1.47	89.94
Ryerson	$4.57 billion	0.28	-$56.40 million	($1.24)	-19.72

Herc has higher earnings, but lower revenue than Ryerson. Ryerson is trading at a lower price-to-earnings ratio than Herc, indicating that it is currently the more affordable of the two stocks.

Summary

Herc beats Ryerson on 13 of the 18 factors compared between the two stocks.

About Herc

Herc Holdings Inc., together with its subsidiaries, operates as an equipment rental supplier. It rents aerial, earthmoving, material handling, trucks and trailers, air compressors, compaction, and lighting equipment, as well as generators, and safety supplies and expendables; and provides ProSolutions, an industry specific solution based services, such as pumping solutions, power generation, climate control, remediation and restoration, and studio and production equipment. The company also sells used equipment and contractor supplies, such as construction consumables, tools, small equipment, and safety supplies; provides repair, maintenance, equipment management, and safety training services, as well as offers ancillary services, such as equipment transport, rental protection, cleaning, refueling, and labor. It serves non-residential and residential construction, specialty trade, restoration, remediation and environment, and facility maintenance contractors; industrial manufacturing industries, including automotive and aerospace, power, metals and mining, agriculture, pulp, paper and wood, food and beverage, and refineries and petrochemical industries; infrastructure and government sectors; and commercial and retail service, hospitality, healthcare, recreation, entertainment production, and special event management customers through its sales team, industry catalogs, as well as through participation and sponsorship of industry events, trade shows, and Internet. As of December 31, 2017, it operated approximately 275 locations in the United States, Canada, China, the United Kingdom, Saudi Arabia, and Qatar. Herc Holdings Inc. is based in Bonita Springs, Florida.

About Ryerson

Ryerson Holding Corporation, together with its subsidiaries, processes and distributes industrial metals in the United States, Canada, Mexico, and China. It offers a line of products in carbon steel, stainless steel, alloy steels, and aluminum, as well as nickel and red metals in various shapes and forms, including coils, sheets, rounds, hexagons, square and flat bars, plates, structural, and tubing. The company also provides various processing services, such as bending, beveling, blanking, blasting, burning, cutting-to-length, drilling, embossing, flattening, forming, grinding, laser cutting, machining, notching, painting, perforating, polishing, punching, rolling, sawing, scribing, shearing, slitting, stamping, tapping, threading, welding, or other techniques to process materials. It serves various industries, including commercial ground transportation, metal fabrication and machine shops, industrial machinery and equipment manufacturing, consumer durable equipment, HVAC manufacturing, construction equipment manufacturing, food processing and agricultural equipment manufacturing, and oil and gas. The company was founded in 1842 and is headquartered in Chicago, Illinois.