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A Merger and acquisition in the construction sector.
United Rentals (URI.N), opens new tab said on Tuesday it would acquire smaller rival H&E Equipment Services (HEES.O), opens new tab in a deal valued at $4.8 billion, as the company looks to tap into demand for equipment rentals in more markets within the United States.
Shares of H&E Equipment were up nearly 106% in early trade, United rose about 5%.

Now how does United Rentals look as a business? To Simply Wall St!!

PE

Not too shabby. Paying $18 bucks to access $1 of earnings. Not bad!

Growth

Not really a growth monster. But the PE is shows this company is coming in at a reasonable price. Meaning since they are growing chances are the company won’t go bankrupt but don’t expect this company to double your investment anytime soon especially when you factor in inflation.

Debt

Yikes this balance sheet is ugly! But construction is always highly leveraged. But yeah a few bad years and this company can go under. Ignore the statement above. This company can definitely go bankrupt! Even the cash levels are dangerously low.

Dividend

A yield of 0.85%! Not much of an incentive to buy and hold this stock. With the debt level and the weak growth they should focus on cleaning up their balance sheet instead of paying out investors.

Who owns them?

Looks like the big brokers probably just plug this stock in to gain exposure to the construction sector. But to me this stock will go where the market goes with most of its holders being institutional which I assume are active investors.

Final thought

No reason to own this company unless you are passionate about construction equipment rental. But I often think of companies like this being a zombie company. So much debt, paying out investors and making an acquisition to hopefully grow their business. But overall this company is a joke. The CEO making $11M per year should be ashamed of himself. The market cap on this company is $50B with the price to own one share is $766
With $766 you can almost buy 1M sats!!! Pass on this company hard.
Good analysis
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