Financial Review: UniFirst (UNF) and General Finance (GFN)

UniFirst (NYSE: UNF) and General Finance (NASDAQ:GFN) are both industrial products companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, earnings, risk, valuation, institutional ownership and profitability.

Volatility and Risk

UniFirst has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500. Comparatively, General Finance has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500.

Institutional & Insider Ownership

74.1% of UniFirst shares are owned by institutional investors. Comparatively, 27.6% of General Finance shares are owned by institutional investors. 1.0% of UniFirst shares are owned by company insiders. Comparatively, 25.9% of General Finance shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

UniFirst pays an annual dividend of $0.15 per share and has a dividend yield of 0.1%. General Finance does not pay a dividend. UniFirst pays out 4.4% of its earnings in the form of a dividend.

Profitability

This table compares UniFirst and General Finance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
UniFirst 4.40% 7.53% 6.06%
General Finance -0.73% -1.29% -0.31%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for UniFirst and General Finance, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
UniFirst 0 2 1 0 2.33
General Finance 0 1 1 0 2.50

UniFirst currently has a consensus price target of $171.00, indicating a potential upside of 3.70%. General Finance has a consensus price target of $9.20, indicating a potential upside of 35.29%. Given General Finance’s stronger consensus rating and higher probable upside, analysts clearly believe General Finance is more favorable than UniFirst.

Valuation & Earnings

This table compares UniFirst and General Finance’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
UniFirst $1.59 billion 2.10 $70.19 million $3.43 48.08
General Finance $276.93 million 0.65 -$2.96 million ($0.21) -32.38

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

Summary

UniFirst beats General Finance on 10 of the 15 factors compared between the two stocks.

UniFirst Company Profile

UniFirst Corporation is a provider of workplace uniforms and protective work wear clothing in the United States. The Company designs, manufactures, personalizes, rents, cleans, delivers, and sells a range of uniforms and protective clothing, including shirts, pants, jackets, coveralls, lab coats, smocks, aprons and specialized protective wear, such as flame resistant and high visibility garments. It operates in six segments: the US Rental and Cleaning, Canadian Rental and Cleaning, Manufacturing (MFG), Specialty Garments Rental and Cleaning (Specialty Garments), First Aid and Corporate. The Company also rents and sells industrial wiping products, floor mats, facility service products and other non-garment items, and provides restroom and cleaning supplies and first aid cabinet services, and other safety supplies. It also decontaminates and cleans work clothes, which has been exposed to radioactive materials and service special cleanroom protective wear and facilities.

General Finance Company Profile

General Finance Corporation is a specialty rental services company. The Company offers a range of portable storage units, including its core 20-feet and 40-feet steel containers, office container, mobile office and modular space products and steel tanks. It has two geographic areas that include its four operating segments: the Asia-Pacific area, consisting of the leasing operations of Royal Wolf Holdings Limited and its Australian and New Zealand subsidiaries (Royal Wolf), and North America, consisting of the combined leasing operations of Pac-Van, Inc. and its Canadian subsidiary, PV Acquisition Corp. (Pac-Van) and Lone Star Tank Rental Inc. (Lone Star), and the manufacturing operations of GFN Manufacturing Corporation and its subsidiary, Southern Frac, LLC (Southern Frac). As of June 30, 2016, the Company provided its storage solutions to over 41,000 customers across a range of industries, including commercial, construction, retail, transportation, education and others.

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