Head-To-Head Survey: H&E Equipment Services (HEES) and ServiceMaster Global Holdings (SERV)
H&E Equipment Services (NASDAQ: HEES) and ServiceMaster Global Holdings (NYSE:SERV) are both industrial products companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, valuation, risk, analyst recommendations, institutional ownership, earnings and profitability.
Insider and Institutional Ownership
75.1% of H&E Equipment Services shares are held by institutional investors. 12.3% of H&E Equipment Services shares are held by company insiders. Comparatively, 1.2% of ServiceMaster Global Holdings shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
H&E Equipment Services pays an annual dividend of $1.10 per share and has a dividend yield of 4.4%. ServiceMaster Global Holdings does not pay a dividend. H&E Equipment Services pays out 99.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Volatility & Risk
H&E Equipment Services has a beta of 2.49, indicating that its stock price is 149% more volatile than the S&P 500. Comparatively, ServiceMaster Global Holdings has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500.
This table compares H&E Equipment Services and ServiceMaster Global Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|H&E Equipment Services||4.08%||27.93%||3.09%|
|ServiceMaster Global Holdings||7.92%||40.74%||5.17%|
This is a breakdown of recent ratings and price targets for H&E Equipment Services and ServiceMaster Global Holdings, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|H&E Equipment Services||0||0||1||0||3.00|
|ServiceMaster Global Holdings||2||0||5||0||2.43|
H&E Equipment Services presently has a consensus price target of $30.00, indicating a potential upside of 20.97%. ServiceMaster Global Holdings has a consensus price target of $43.57, indicating a potential downside of 6.72%. Given H&E Equipment Services’ stronger consensus rating and higher probable upside, research analysts clearly believe H&E Equipment Services is more favorable than ServiceMaster Global Holdings.
Earnings and Valuation
This table compares H&E Equipment Services and ServiceMaster Global Holdings’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|H&E Equipment Services||$965.22 million||0.90||$137.07 million||$1.11||22.34|
|ServiceMaster Global Holdings||$2.84 billion||2.19||$665.00 million||$1.66||28.14|
ServiceMaster Global Holdings has higher revenue and earnings than H&E Equipment Services. H&E Equipment Services is trading at a lower price-to-earnings ratio than ServiceMaster Global Holdings, indicating that it is currently the more affordable of the two stocks.
ServiceMaster Global Holdings beats H&E Equipment Services on 10 of the 16 factors compared between the two stocks.
About H&E Equipment Services
H&E Equipment Services, Inc. is an integrated equipment services company. The Company is focused on heavy construction and industrial equipment. As of December 31, 2016, the Company rented, sold and provided parts and services support for four core categories of specialized equipment: hi-lift or aerial work platform equipment; cranes; earthmoving equipment, and industrial lift trucks. The Company’s principal business activities include equipment rentals; new equipment sales; used equipment sales; parts sales, and repair and maintenance services. As of February 16, 2017, the Company had 78 facilities located throughout the West Coast, Intermountain, Southwest, Gulf Coast, Southeast and Mid-Atlantic regions of the United States. The Company rents its heavy construction and industrial equipment to its customers on a daily, weekly and monthly basis. The Company sells new heavy construction and industrial equipment. The Company is a distributor of Grove and Manitowoc crane equipment.
About ServiceMaster Global Holdings
ServiceMaster Global Holdings, Inc. is a provider of essential residential and commercial services. The Company operates through three segments: Terminix, American Home Shield and the Franchise Services Group. Its portfolio of brands includes Terminix, American Home Shield, ServiceMaster Restore, ServiceMaster Clean, Merry Maids, Furniture Medic and AmeriSpec. The Terminix segment provides termite and pest control services in the United States. The American Home Shield segment provides home warranty plans that cover the repair or replacement of components of up to 21 household systems and appliances, including electrical, plumbing, central heating and air conditioning (HVAC) systems, dishwashers and ovens/cook tops. The Franchise Services Group segment consists of the ServiceMaster Restore (disaster restoration), ServiceMaster Clean (janitorial), Merry Maids (residential cleaning), Furniture Medic (cabinet and wood furniture repair) and AmeriSpec (home inspection) businesses.
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