Head-To-Head Comparison: Aercap (NYSE:AER) versus Localiza Rent a Car (OTCMKTS:LZRFY)

Localiza Rent a Car (OTCMKTS:LZRFY) and Aercap (NYSE:AER) are both industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Analyst Ratings

This is a summary of recent recommendations for Localiza Rent a Car and Aercap, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Localiza Rent a Car	1	0	0	0	1.00
Aercap	0	1	9	1	3.00

Aercap has a consensus price target of $172.56, suggesting a potential upside of 21.69%. Given Aercap’s stronger consensus rating and higher probable upside, analysts clearly believe Aercap is more favorable than Localiza Rent a Car.

Dividends

Localiza Rent a Car pays an annual dividend of $0.34 per share and has a dividend yield of 4.7%. Aercap pays an annual dividend of $1.60 per share and has a dividend yield of 1.1%. Localiza Rent a Car pays out 56.7% of its earnings in the form of a dividend. Aercap pays out 7.9% 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. Aercap has increased its dividend for 2 consecutive years.

Profitability

This table compares Localiza Rent a Car and Aercap’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Localiza Rent a Car	7.43%	13.79%	4.18%
Aercap	37.85%	17.60%	4.51%

Institutional & Insider Ownership

96.4% of Aercap shares are owned by institutional investors. 0.5% of Aercap shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Localiza Rent a Car and Aercap”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Localiza Rent a Car	$7.48 billion	N/A	$335.90 million	$0.60	12.08
Aercap	$8.52 billion	2.78	$3.75 billion	$20.32	6.98

Aercap has higher revenue and earnings than Localiza Rent a Car. Aercap is trading at a lower price-to-earnings ratio than Localiza Rent a Car, indicating that it is currently the more affordable of the two stocks.

Summary

Aercap beats Localiza Rent a Car on 14 of the 16 factors compared between the two stocks.

About Localiza Rent a Car

Localiza Rent a Car S.A. engages in car and fleet rental business. The company is also involved in granting franchises; sale of decommissioned and used cars; provision of sundry automotive, and travel and tourism services; and managing claims for insurance companies, as well as provision of tracking and telemetry services. It operates car rental agencies in Brazil, Argentina, Colombia, Ecuador, and Paraguay. The company serves individuals and legal entities. Localiza Rent a Car S.A. was founded in 1973 and is headquartered in Belo Horizonte, Brazil.

About Aercap

AerCap Holdings N.V. engages in the lease, financing, sale, and management of commercial flight equipment in China, Hong Kong, Macau, the United States, Ireland, and internationally. The company offers aircraft asset management services, such as remarketing aircraft and engines; collecting rental and maintenance rent payments, monitoring aircraft maintenance, monitoring and enforcing contract compliance, and accepting delivery and redelivery of aircraft and engines; and conducting ongoing lessee financial performance reviews. Its aircraft asset management services also include periodically inspecting the leased aircraft and engines; coordinating technical modifications to aircraft to meet new lessee requirements; conducting restructuring negotiations in connection with lease defaults; repossessing aircraft and engines; arranging and monitoring insurance coverage; registering and de-registering aircraft; arranging for aircraft and engine valuations; and providing market research services. In addition, the company provides cash management services, including treasury services, such as the financing, refinancing, hedging, and ongoing cash management of vehicles; and administrative services comprising accounting and corporate secretarial services consisting of the preparation of budgets and financial statements. Further, it offers airframe and engine parts and supply chain solutions to airlines; maintenance, repair, and overhaul service providers; and aircraft parts distributors. The company had a portfolio of owned, managed, or on order aircraft. AerCap Holdings N.V. was founded in 1995 and is headquartered in Dublin, Ireland.