Ferguson (OTCMKTS:FERGY) versus United Rentals (NYSE:URI) Head to Head Comparison

United Rentals (NYSE:URI) and Ferguson (OTCMKTS:FERGY) are both large-cap industrials companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares United Rentals and Ferguson”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Rentals	$16.10 billion	4.23	$2.49 billion	$41.64	26.30
Ferguson	$27.54 billion	9.76	$961.00 million	$0.65	183.83

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

Insider & Institutional Ownership

96.3% of United Rentals shares are held by institutional investors. Comparatively, 0.2% of Ferguson shares are held by institutional investors. 0.5% of United Rentals shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations for United Rentals and Ferguson, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Rentals	1	0	16	1	2.94
Ferguson	0	0	0	0	0.00

United Rentals currently has a consensus target price of $1,246.19, indicating a potential upside of 13.79%. Given United Rentals’ stronger consensus rating and higher possible upside, equities analysts plainly believe United Rentals is more favorable than Ferguson.

Dividends

United Rentals pays an annual dividend of $7.88 per share and has a dividend yield of 0.7%. Ferguson pays an annual dividend of $0.36 per share and has a dividend yield of 0.3%. United Rentals pays out 18.9% of its earnings in the form of a dividend. Ferguson pays out 55.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. United Rentals has increased its dividend for 3 consecutive years. United Rentals is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

United Rentals has a beta of 1.8, suggesting that its stock price is 80% more volatile than the S&P 500. Comparatively, Ferguson has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500.

Profitability

This table compares United Rentals and Ferguson’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%
Ferguson	N/A	N/A	N/A

Summary

United Rentals beats Ferguson on 15 of the 18 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 Ferguson

Ferguson plc distributes plumbing and heating products in the United States, the United Kingdom, Canada, and Central Europe. It offers plumbing and heating solutions to customers in the residential, municipal, civil and industrial markets, and commercial sectors for repair, maintenance, and improvement (RMI), as well as new construction markets. The company also distributes pipes, valves, fittings, hydrants, meters, and related water management products, as well as offers related services, such as water line tapping and pipe fusion services. In addition, it distributes heating, ventilation, air conditioning, refrigeration equipment, and parts and supplies to specialist contractors in the residential and commercial markets for repair and replacement; and PVF products to industrial customers. Further, the company fabricates and supplies fire protection systems and bespoke fabrication services to commercial contractors for new construction and renovation projects, as well as offers products, services, and solutions to enable maintenance of facilities across various RMI markets. Additionally, it offers supply chain management solutions for PVF; and industrial maintenance, repair, and operations specializing in delivering automation, instrumentation, engineered products, and turn-key solutions. The company also sells its home improvement products directly to consumers, as well as through a network of online stores. In addition, it operates its B2B business primarily under the Ferguson brand; and B2C business under the Build.com brand. Further, the company provides products and services for maintenance of multi-family properties, government agencies, hospitality, education, healthcare, and other facilities. It operates a network of 2,194 branches and 19 distribution centers. Ferguson plc was founded in 1887 and is headquartered in Wokingham, the United Kingdom.