Head-To-Head Review: United Rentals (NYSE:URI) & Masco (NYSE:MAS)

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

Risk and Volatility

Masco has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500. Comparatively, United Rentals has a beta of 1.7, suggesting that its share price is 70% more volatile than the S&P 500.

Institutional & Insider Ownership

93.9% of Masco shares are owned by institutional investors. Comparatively, 96.3% of United Rentals shares are owned by institutional investors. 0.5% of Masco shares are owned by company insiders. Comparatively, 0.5% of United Rentals 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Masco	10.71%	856.70%	15.90%
United Rentals	15.49%	30.35%	9.27%

Dividends

Masco pays an annual dividend of $1.28 per share and has a dividend yield of 1.7%. United Rentals pays an annual dividend of $7.88 per share and has a dividend yield of 0.9%. Masco pays out 33.2% of its earnings in the form of a dividend. United Rentals pays out 20.4% 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. Masco has raised its dividend for 12 consecutive years and United Rentals has raised its dividend for 3 consecutive years. Masco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current recommendations for Masco and United Rentals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Masco	0	13	7	0	2.35
United Rentals	1	3	12	2	2.83

Masco presently has a consensus price target of $76.94, indicating a potential upside of 4.26%. United Rentals has a consensus price target of $925.59, indicating a potential upside of 3.21%. Given Masco’s higher probable upside, analysts plainly believe Masco is more favorable than United Rentals.

Valuation and Earnings

This table compares Masco and United Rentals”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Masco	$7.56 billion	1.99	$810.00 million	$3.85	19.17
United Rentals	$16.10 billion	3.51	$2.49 billion	$38.68	23.19

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

Summary

United Rentals beats Masco on 13 of the 18 factors compared between the two stocks.

About Masco

Masco Corporation designs, manufactures, and distributes home improvement and building products in North America, Europe, and internationally. The company's Plumbing Products segment offers faucets, showerheads, handheld showers, valves, bath hardware and accessories, bathing units, shower bases and enclosures, sinks, toilets, acrylic tubs, shower trays, spas, exercise pools, and fitness systems; brass, copper, and composite plumbing system components; connected water products; thermoplastic solutions, extruded plastic profiles, specialized fabrications, and PEX tubing products; and other non-decorative plumbing products. This segment provides its products under the DELTA, BRIZO, PEERLESS, HANSGROHE, AXOR, KRAUS, EASY DRAIN, STEAMIST, ELITESTEAM, GINGER, NEWPORT BRASS, BRASSTECH, WALTEC, BRISTAN, HERITAGE, MIROLIN, HOT SPRING, CALDERA, FREEFLOW SPAS, FANTASY SPAS, ENDLESS POOLS, BRASSCRAFT, PLUMB SHOP, COBRA, COBRA PRO, and MASTER PLUMBER brands. Its Decorative Architectural Products segment offers paints, primers, specialty coatings, stains, and waterproofing products, as well as paint applicators and accessories; cabinet and door hardware, functional hardware, wall plates, hook and rail products, closet organization systems, and picture hanging accessories; decorative bath hardware, mirrors, and shower accessories and doors; and decorative indoor and outdoor lighting fixtures, ceiling fans, landscape lighting, and LED lighting systems. This segment provides its products under the BEHR, KILZ, WHIZZ, Elder & Jenks, LIBERTY, BRAINERD, FRANKLIN BRASS, KICHLER, and ÉLAN brands. It sells its products to the plumbing, heating, and hardware wholesalers; home centers and online retailers; hardware stores; electrical and landscape distributors; lighting showrooms; building supply outlets; and other mass merchandisers. Masco Corporation was incorporated in 1929 and is headquartered in Livonia, Michigan.

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.