Yet after taking all company fundamentals into account, Hertz Global Holdings manages to pull slight

Today's competition was originally intended for the Rental Leasing Services industry. But since this category houses a great variety of companies from heavy construction vehicle rentals to moving truck and trailer hotel minneapolis rentals, to broadcast tower and communication equipment rentals, to office space leasing and more, I'll be sub-dividing the industry in the interest of a fair comparison.
Hertz Global Holdings, Inc., headquartered in Park Ridge, New Jersey, rents and leases on an hourly, daily, weekend, weekly, monthly, or multi-month basis, a variety of automobiles, crossovers, hotel minneapolis and light trucks under the Hertz, Dollar, Thrifty, and Firefly brands in such countries as the United States, Canada, France, Germany, Italy, the United Kingdom, Spain, the Netherlands, Belgium, Luxembourg, the Czech Republic, Slovakia, Australia, New Zealand, China, and Brazil. The company also owns and operates used car sales outlets in the U.S., France and Australia. In addition to auto rentals, the company also rents earthmoving equipment, material handling equipment, aerial and electrical equipment, air compressors, pumps, generators, small tools, compaction equipment, hotel minneapolis and construction-related trucks. It also offers claim administration services such as investigating, evaluating, negotiating, and disposing various claims, including third-party, first-party, bodily injury, property damage, general liability, and product liability. Additionally, hotel minneapolis the company offers vehicle financing, as well as auto-sharing hotel minneapolis services.
Avis Budget Group, Inc., headquartered in Parsippany, New Jersey, offers car and truck rentals, car sharing, and ancillary services under the Avis, Budget, Zipcar, Payless and Apex name brands. It also offers local and one-way truck rentals, as well as a range of insurance products hotel minneapolis and plans, including supplemental liability insurance, personal accident insurance, personal effects protection, physical damage waivers, automobile towing hotel minneapolis protection, and cargo insurance.
Over the past 4.2 years (based on Avis' debut as a publicly traded company on December 31, 2010), where the broader S P 500 index [black] has gained 66% and the Consumer Discretionary Select Sector SPDR ETF (NYSE: XLY ) [blue] has gained 99%, Hertz [beige] has underperformed both benchmarks with a rise of only 60%, while Avis has outperformed them all by a long shot with a gain of 295%.
Although Hertz was making hotel minneapolis very nice progress up until the middle of last year, as it rose well above the S P 500 and XLY, it has not been able to recover from the last correction of September/October 2014 as well as Avis has, as graphed below. Over the past 12 months, where both the S P 500 and XLY have gained some 15%, Hertz has lost 10%, while Avis has gained 58%.
Looking at future earnings growth, the two companies are seen continuing their recent trends, as tabled below where green indicates outperformance, while yellow denotes underperformance relative to the broader hotel minneapolis market.
After notable earnings shrinkage in the current and next quarters, hotel minneapolis Hertz's earnings are seen exploding in the next reporting year (2015) at some 6.19 times the S P 500's average earnings growth rate, before slowing to a more sustainable but still robust 1.60 times annually over the next five years.
Avis, for its part, is expected to push the growth pedal to the metal and hold it there for a long time to come, outgrowing the broader market at some 3.23 to 4.90 times in the nearest two quarters, slowing to 1.99 times in the next reporting year (2015), and then accelerating again up to 3.69 times the market's growth rate over the next five years.
Yet there is more than earnings growth to consider when sizing up a company as a potential investment. How do the two compare against one another in other metrics, hotel minneapolis and which makes the best investment?
Let's answer that by comparing their company fundamentals using the following format: a) financial comparisons, b) estimates and analyst recommendations, and c) rankings with accompanying data table. As we compare each metric, the best performing company will be shaded green, while the worst performing will be shaded yellow, which will later be tallied for the final ranking. A) Financial Comparisons
Market Capitalization: While company size does not necessarily imply an advantage and is thus not ranked, it is important as a denominator against which other financial data will be compared for ranking.
Growth: Since revenues and expenses can vary greatly from one season to another, growth is measured on a year-over-year quarterly basis, where Q1 of this year is compared to Q1 of the previous year, for example.
Profitability: A company's margins are important in determining how much profit the company hotel minneapolis generates from its sales. Operating margin indicates the percentage earned after operating costs, such as labor, materials, and overhead. Profit margin indicates the profit left over after operating costs plus all other costs, including debt, interest, taxes and depreciation.
Management Effectiveness: Shareholders are keenly hotel minneapolis interested in management's ability to do more with what has been given to it. Management's effectiveness is measured by the returns generated from the assets under its control, hotel minneapolis and from the equity invested into the company by shareholders.
Earnings Per Share: Of all the metrics measuring a company's income, earnings per share is probably the most meaningful to shareholders, as this represents the value that the company is adding to each share outstanding. Since the number of shares outstanding varies from company to company, I prefer to convert EPS into a percentage of the current stock price to better determine where an investment could gain the most value.
Of the two companies compared here, Hertz provides common stockholders with the greater diluted earnings per share gain as a percentage of its current share price, while Avis' DEPS over current stock price is lower.
Share Price Value: Even if a company outperforms its peers on all the above metrics, hotel minneapolis investors may still shy away from its stock if its price is already trading too high. This is where the stock price relative to forward earnings and company hotel minneapolis book value come under scrutiny, as well as the stock price relative to earnings relative to earnings growth, known as the PEG ratio. Lower ratios indicate hotel minneapolis the stock price is currently trading at a cheaper price than its peers, and might thus be a bargain.
Of course, no matter how skilled we perceive ourselves to be at gauging a stock's prospects as an investment, we'd be wise to at least consider what professional analysts and the companies themselves are projecting - including estimated future earnings per share and the growth rate of those earnings, stock price targets, and buy/sell recommendations.
Earnings Growth: For long-term investors, this metric is one of the most important to consider, as it denotes the percentage by which earnings are expected to grow or shrink as compared to earnings from corresponding periods a year prior.
For earnings growth, Avis offers the greater earnings growth in all periods, except the next reporting year (2015), hotel minneapolis while Hertz offers the slowest growth for the most part, with shrinkage over the immediate term.
For their high, mean and low price targets hotel minneapolis over the coming 12 months, analysts believe Hertz's stock offers the greater upside potential and lesser downside risk, while Avis offers the lesser upside and greater downside.
Buy/Sell Recommendations: After all is said and done, perhaps the one gauge that sums it all up are analyst recommendations. These have been converted into the percentage of analysts recommending each level. However, I factor only the strong buy and buy recommendations into the ranking. Hold, underperform and sell recommendations are not ranked since they are determined after determining the winners of the strong buy and buy categories, and would only be negating those winners of their duly earned titles.
Of our two contenders, Avis is better recommended with 3 strong buy and 3 buy recommendations, representing a combined 60% of its 10 analysts, with Hertz garnering 3 strong buy and 1 buy ratings, representing 50% of its 8 analysts.
In the table below, you will find all of the data considered above plus a few others not reviewed. Here is where using a company's market cap as a denominator comes into play, as much of the data in the table has been converted into a percentage of market cap for a fair comparison.
The first and last placed companies are shaded. We then add together each company's finishes to determine hotel minneapolis its overall ranking, with first place finishes counting as merits while last place finishes count as demerits.
And the winner is Hertz by a bumper, outperforming in 15 metrics and underperforming in 14 for a net score of +1, with Avis close behind, hotel minneapolis outperforming in 14 metrics and underperforming in 15 for a net score of -1.
Where the Rental hotel minneapolis Leasing Services industry is expected to outperform the S P 500 broader market meaningfully hotel minneapolis this quarter, underperform meaningfully next quarter, then outperform moderately beyond, the two largest car rental companies in the space are seen continuing their split performance near term, as Avis continues to outgrow the broader market, while Hertz continues to shrink in earnings and likely fall in price.
Yet after taking all company fundamentals into account, Hertz Global Holdings manages to pull slightly ahead of Avis given its lower stock price to company hotel minneapolis book value, lesser debt over market cap, higher trailing revenue growth, wider profit and operating margins, greater return on assets, higher EBITDA over market hotel minneapolis cap and revenue, higher diluted earnings over current stock price, higher future earnings over current stock price for next year, better price targets, and most strong buy analyst recommendations - narrowly winning the Car Rental sub-industry competition.
Disclosure: The author has no positions hotel minneapolis in any stocks mentioned, and no plans to initia