Financial Review: United Rentals (URI) versus Maximus (MMS)

Maximus (NYSE: MMS) and United Rentals (NYSE:URI) are both mid-cap business services companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, risk, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Insider & Institutional Ownership

97.6% of Maximus shares are held by institutional investors. Comparatively, 91.9% of United Rentals shares are held by institutional investors. 3.1% of Maximus shares are held by insiders. Comparatively, 1.2% of United Rentals shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Maximus and United Rentals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Maximus 8.54% 23.97% 15.63%
United Rentals 9.64% 44.81% 6.66%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Maximus and United Rentals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Maximus 0 6 0 0 2.00
United Rentals 1 5 10 0 2.56

Maximus presently has a consensus price target of $61.33, suggesting a potential downside of 5.10%. United Rentals has a consensus price target of $144.91, suggesting a potential upside of 0.21%. Given United Rentals’ stronger consensus rating and higher probable upside, analysts plainly believe United Rentals is more favorable than Maximus.

Earnings & Valuation

This table compares Maximus and United Rentals’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Maximus $2.45 billion 1.71 $209.42 million $3.18 20.32
United Rentals $5.76 billion 2.12 $566.00 million $7.05 20.51

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

Volatility & Risk

Maximus has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500. Comparatively, United Rentals has a beta of 2.65, indicating that its share price is 165% more volatile than the S&P 500.

Dividends

Maximus pays an annual dividend of $0.18 per share and has a dividend yield of 0.3%. United Rentals does not pay a dividend. Maximus pays out 5.7% of its earnings in the form of a dividend.

Summary

United Rentals beats Maximus on 11 of the 16 factors compared between the two stocks.

About Maximus

MAXIMUS, Inc. provides business process services (BPS) to government health and human services agencies. The Company operates through three segments: U.S. Federal Services, Health Services and Human Services. The U.S. Federal Services segment provides BPS and program management for large government programs, independent health review and appeals services for both the United States Federal Government, and state-based programs and technology solutions for civilian federal programs. The Health Services segment provides a range of BPS, as well as related consulting services, for state, provincial and national government programs. The Human Services segment provides national, state and local human services agencies with a range of BPS and related consulting services for welfare-to-work, child support, higher education and K-12 special education programs.

About United Rentals

United Rentals, Inc. is a holding company. The Company is an equipment rental company, which operates throughout the United States and Canada. It operates through two segments: general rentals, and trench, power and pump. The general rentals segment includes the rental of construction, aerial, industrial and homeowner equipment and related services and activities. The trench, power and pump segment includes the rental of specialty construction products and related services. Its general rentals segment includes the rental of general construction and industrial equipment, such as backhoes, skid-steer loaders, forklifts and material handling equipment; aerial work platforms, such as boom lifts and scissor lifts, and general tools and light equipment, such as pressure washers, water pumps and power tools. As of January 1, 2017, it operated 887 rental locations. The Company conducts its operations through its subsidiary, United Rentals (North America), Inc. (URNA) and subsidiaries of URNA.

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