James Hardie Industries (NYSE:JHX) vs. United Rentals (NYSE:URI) Critical Analysis

United Rentals (NYSE:URI) and James Hardie Industries (NYSE:JHX) are both construction companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, valuation, risk, institutional ownership, profitability and dividends.

Risk & Volatility

United Rentals has a beta of 1.68, meaning that its stock price is 68% more volatile than the S&P 500. Comparatively, James Hardie Industries has a beta of 1.84, meaning that its stock price is 84% more volatile than the S&P 500.

Insider and Institutional Ownership

96.3% of United Rentals shares are held by institutional investors. Comparatively, 8.0% of James Hardie Industries shares are held by institutional investors. 0.5% of United Rentals shares are held 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 United Rentals and James Hardie Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Rentals	15.49%	30.35%	9.27%
James Hardie Industries	2.70%	13.52%	5.81%

Analyst Recommendations

This is a breakdown of recent recommendations for United Rentals and James Hardie Industries, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Rentals	1	3	12	2	2.83
James Hardie Industries	0	4	10	0	2.71

United Rentals currently has a consensus price target of $925.59, suggesting a potential upside of 26.17%. James Hardie Industries has a consensus price target of $26.63, suggesting a potential upside of 42.04%. Given James Hardie Industries’ higher possible upside, analysts plainly believe James Hardie Industries is more favorable than United Rentals.

Earnings and Valuation

This table compares United Rentals and James Hardie Industries”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Rentals	$16.10 billion	2.87	$2.49 billion	$38.68	18.97
James Hardie Industries	$3.88 billion	2.08	$424.00 million	$0.27	69.43

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

Summary

United Rentals beats James Hardie Industries on 12 of the 15 factors compared between the two stocks.

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.

About James Hardie Industries

James Hardie Industries plc manufactures and sells fiber cement, fiber gypsum, and cement bonded building products for interior and exterior building construction applications primarily in the United States, Australia, Europe, New Zealand, and the Philippines. The company operates through North America Fiber Cement, Asia Pacific Fiber Cement, and Europe Building Products segments. It offers fiber cement interior linings, exterior siding products, and related accessories; and various fiber cement products for a range of applications, including external cladding, internal walls, ceilings, floors, soffits, fences, and facades. The company also provides fiber gypsum and cement-bonded boards for use in the timber frame construction, dry lining, DIY, and structural fire protection applications. Its products are used in residential repair and remodel, and commercial and residential new construction markets James Hardie Industries plc was founded in 1888 and is based in Dublin, Ireland.