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

Profitability

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

Net Margins Return on Equity Return on Assets
United Rentals 9.86% 46.01% 6.42%
MAXIMUS 9.62% 26.77% 17.83%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for United Rentals and MAXIMUS, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Rentals 1 4 10 0 2.60
MAXIMUS 0 7 0 0 2.00

United Rentals currently has a consensus price target of $135.42, indicating a potential downside of 7.12%. MAXIMUS has a consensus price target of $61.50, indicating a potential downside of 5.52%. Given MAXIMUS’s higher possible upside, analysts clearly believe MAXIMUS is more favorable than United Rentals.

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.

Valuation & Earnings

This table compares United Rentals and MAXIMUS’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
United Rentals $5.98 billion 2.06 $1.75 billion $6.89 21.16
MAXIMUS $2.45 billion 1.72 $384.41 million $3.14 20.73

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.

Insider and Institutional Ownership

93.7% of United Rentals shares are held by institutional investors. Comparatively, 97.2% of MAXIMUS shares are held by institutional investors. 1.2% of United Rentals shares are held by company insiders. Comparatively, 3.1% of MAXIMUS shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

United Rentals has a beta of 2.46, suggesting that its share price is 146% more volatile than the S&P 500. Comparatively, MAXIMUS has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500.

Summary

United Rentals beats MAXIMUS on 10 of the 16 factors compared between the two stocks.

United Rentals Company Profile

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.

MAXIMUS Company Profile

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.

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