Financial Analysis: FirstCash (NASDAQ:FCFS) and RB Global (NYSE:RBA)

FirstCash (NASDAQ:FCFS) and RB Global (NYSE:RBA) are both business services companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, risk, dividends, institutional ownership and profitability.

Risk & Volatility

FirstCash has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500. Comparatively, RB Global has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500.

Profitability

This table compares FirstCash and RB Global’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FirstCash	8.88%	17.44%	7.92%
RB Global	9.65%	9.66%	4.31%

Insider and Institutional Ownership

80.3% of FirstCash shares are held by institutional investors. Comparatively, 95.4% of RB Global shares are held by institutional investors. 2.9% of FirstCash shares are held by company insiders. Comparatively, 4.3% of RB Global shares are held 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.

Analyst Ratings

This is a summary of current ratings and price targets for FirstCash and RB Global, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FirstCash	0	2	5	1	2.88
RB Global	0	2	6	0	2.75

FirstCash currently has a consensus price target of $167.00, suggesting a potential downside of 2.40%. RB Global has a consensus price target of $122.88, suggesting a potential upside of 8.82%. Given RB Global’s higher probable upside, analysts plainly believe RB Global is more favorable than FirstCash.

Earnings and Valuation

This table compares FirstCash and RB Global”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FirstCash	$3.39 billion	2.23	$258.82 million	$6.93	24.69
RB Global	$4.28 billion	4.90	$413.10 million	$2.09	54.03

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

Dividends

FirstCash pays an annual dividend of $1.68 per share and has a dividend yield of 1.0%. RB Global pays an annual dividend of $1.24 per share and has a dividend yield of 1.1%. FirstCash pays out 24.2% of its earnings in the form of a dividend. RB Global pays out 59.3% 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. FirstCash has increased its dividend for 8 consecutive years and RB Global has increased its dividend for 20 consecutive years. RB Global is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

RB Global beats FirstCash on 12 of the 18 factors compared between the two stocks.

About FirstCash

FirstCash Holdings, Inc, together with its subsidiaries, operates retail pawn stores in the United States, Mexico, and rest of Latin America. The company operates in three segments: U.S. Pawn, Latin America Pawn, and Retail POS Payment Solutions segments. Its pawn stores lend money on the collateral of pledged personal property, including jewelry, electronics, tools, appliances, sporting goods, and musical instruments; and retails merchandise acquired through collateral forfeitures on forfeited pawn loans and over-the-counter purchases of merchandise directly from customers. The company also provides retail POS payment solutions, which focuses on LTO products and facilitating other retail financing payment options across the network of traditional and e-commerce merchant partners. It serves cash and credit-constrained consumers. The company was formerly known as FirstCash, Inc and changed its name to FirstCash Holdings, Inc. in December 2021. FirstCash Holdings, Inc was incorporated in 1988 and is headquartered in Fort Worth, Texas.

About RB Global

RB Global, Inc., an omnichannel marketplace, provides insights, services, and transaction solutions for buyers and sellers of commercial assets and vehicles worldwide. Its marketplace brands include Ritchie Bros., an auctioneer of commercial assets and vehicles offering online bidding; IAA, a digital marketplace connecting vehicle buyers and sellers; Rouse Services, which provides asset management, data-driven intelligence, and performance benchmarking system; SmartEquip, a technology platform that supports customers' management of the equipment lifecycle; and Veritread, an online marketplace for heavy haul transport solution. The company's brands include GovPlanet, an online marketplace for the sale of government and military assets; RB Auction, an onsite and online marketplace for selling and buying used equipment; IronPlanet, an online marketplace for selling and buying used equipment; Marketplace-E, an online solution that make offers/buy now format; Rouse Appraisals, a certified appraisal service solution; Ritchie List Mascus, an online equipment listing service and B2B dealer portal; CSAToday, an online reporting and analysis tool that gives sellers the ability to manage their vehicle assets and monitor sales performance; and Catastrophe Response Services. In addition, it offers title, data, transportation and logistics, refurbishing, inspection, and financial services. It serves customers across various asset classes, including automotive, commercial transportation, construction, government surplus, lifting and material handling, energy, mining, and agriculture. RB Global, Inc. was founded in 1958 and is headquartered in Westchester, Illinois.