Herc Holdings (NYSE: HRI) and Avis Budget Group (NASDAQ:CAR) are both transportation companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitabiliy, analyst recommendations, valuation, earnings and institutional ownership.

Profitability

This table compares Herc Holdings and Avis Budget Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Herc Holdings -3.69% -7.69% -0.71%
Avis Budget Group 1.24% 74.55% 1.14%

Volatility and Risk

Herc Holdings has a beta of 2.49, meaning that its share price is 149% more volatile than the S&P 500. Comparatively, Avis Budget Group has a beta of 2.47, meaning that its share price is 147% more volatile than the S&P 500.

Valuation & Earnings

This table compares Herc Holdings and Avis Budget Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Herc Holdings $1.58 billion 0.74 $105.70 million ($2.05) -20.03
Avis Budget Group $8.62 billion 0.28 $950.00 million $1.06 26.99

Avis Budget Group has higher revenue and earnings than Herc Holdings. Herc Holdings is trading at a lower price-to-earnings ratio than Avis Budget Group, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

96.7% of Herc Holdings shares are held by institutional investors. 0.1% of Herc Holdings shares are held by company insiders. Comparatively, 2.8% of Avis Budget Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations for Herc Holdings and Avis Budget Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Herc Holdings 0 4 3 0 2.43
Avis Budget Group 1 3 4 0 2.38

Herc Holdings presently has a consensus price target of $43.83, indicating a potential upside of 6.73%. Avis Budget Group has a consensus price target of $35.38, indicating a potential upside of 23.65%. Given Avis Budget Group’s higher possible upside, analysts clearly believe Avis Budget Group is more favorable than Herc Holdings.

Summary

Avis Budget Group beats Herc Holdings on 9 of the 13 factors compared between the two stocks.

Herc Holdings Company Profile

Herc Holdings Inc. is an equipment rental supplier. The Company operates approximately 280 branches, of which approximately 270 are in the United States and Canada. It supplies equipment to the markets, including commercial and residential construction, industrial and manufacturing, refineries and petrochemicals, civil infrastructure, automotive, government and municipalities, energy, remediation, emergency response, facilities, entertainment and agriculture. It operates through its Herc Rentals Inc. subsidiary. Its equipment rental business is supported by ProSolutions, its industry-specific solutions-based services, and its ProContractor Tools line. The ProContractor equipment line includes a range of tools, such as air compressors and tool, climate control, plumbing, care and surface preparation. The ProSolutions Industrial Services is a global operation providing an industrial line of products and services, including mobile tool rooms and asset management systems.

Avis Budget Group Company Profile

Avis Budget Group Inc. is a provider of vehicle rental and car sharing services. The Company operates three brands, which include Avis, Budget and Zipcar. Avis and Budget are a rental car supplier. It also owns Payless, which a car rental brand; Apex, which is a car rental brand in New Zealand and Australia; Maggiore, a vehicle rental brand in Italy, and France Cars, which operates light commercial vehicle fleets in France. The Company operates in two segments: Americas and International. The Americas segment provides and licenses the Company’s brands to third parties for vehicle rentals and ancillary products and services in North America, South America, Central America and the Caribbean, and operates its car sharing business in certain of these markets. The International segment provides and licenses the Company’s brands to third parties for vehicle rentals and ancillary products and services in Europe, the Middle East, Africa, Asia, Australia and New Zealand.

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