MCGRATH RENTCORP (MGRC) Stock Fundamental Analysis
NASDAQ:MGRC - Nasdaq - US5805891091 - Common Stock - Currency: USD
MGRC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 48 industry peers in the Trading Companies & Distributors industry. MGRC has an excellent profitability rating, but there are some minor concerns on its financial health. MGRC has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
MGRC had positive earnings in the past year.
In the past year MGRC had a positive cash flow from operations.
In the past 5 years MGRC has always been profitable.
Each year in the past 5 years MGRC had a positive operating cash flow.
1.2 Ratios
MGRC's Return On Assets of 10.57% is amongst the best of the industry. MGRC outperforms 87.50% of its industry peers.
Looking at the Return On Equity, with a value of 20.86%, MGRC is in the better half of the industry, outperforming 77.08% of the companies in the same industry.
MGRC has a Return On Invested Capital of 8.00%. This is in the better half of the industry: MGRC outperforms 66.67% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MGRC is in line with the industry average of 9.66%.
The 3 year average ROIC (7.67%) for MGRC is below the current ROIC(8.00%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.57% | ||
| ROE | 20.86% | ||
| ROIC | 8% |
ROA(3y)8.26%
ROA(5y)7.68%
ROE(3y)17.88%
ROE(5y)16.17%
ROIC(3y)7.67%
ROIC(5y)7.89%
1.3 Margins
The Profit Margin of MGRC (25.81%) is better than 97.92% of its industry peers.
In the last couple of years the Profit Margin of MGRC has grown nicely.
Looking at the Operating Margin, with a value of 24.54%, MGRC belongs to the top of the industry, outperforming 89.58% of the companies in the same industry.
MGRC's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 47.75%, MGRC belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
In the last couple of years the Gross Margin of MGRC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 24.54% | ||
| PM (TTM) | 25.81% | ||
| GM | 47.75% |
OM growth 3Y5.79%
OM growth 5Y0.79%
PM growth 3Y20.49%
PM growth 5Y8.42%
GM growth 3Y1.61%
GM growth 5Y0.47%
2. Health
2.1 Basic Checks
MGRC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for MGRC has been increased compared to 1 year ago.
Compared to 5 years ago, MGRC has more shares outstanding
Compared to 1 year ago, MGRC has an improved debt to assets ratio.
2.2 Solvency
MGRC has an Altman-Z score of 2.96. This is not the best score and indicates that MGRC is in the grey zone with still only limited risk for bankruptcy at the moment.
MGRC's Altman-Z score of 2.96 is in line compared to the rest of the industry. MGRC outperforms 47.92% of its industry peers.
The Debt to FCF ratio of MGRC is 2.48, which is a good value as it means it would take MGRC, 2.48 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.48, MGRC is in the better half of the industry, outperforming 70.83% of the companies in the same industry.
A Debt/Equity ratio of 0.49 indicates that MGRC is not too dependend on debt financing.
MGRC has a Debt to Equity ratio (0.49) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 2.48 | ||
| Altman-Z | 2.96 |
ROIC/WACC0.8
WACC10.02%
2.3 Liquidity
MGRC has a Current Ratio of 1.56. This is a normal value and indicates that MGRC is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.56, MGRC is doing worse than 62.50% of the companies in the same industry.
A Quick Ratio of 1.44 indicates that MGRC should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.44, MGRC perfoms like the industry average, outperforming 58.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.56 | ||
| Quick Ratio | 1.44 |
3. Growth
3.1 Past
MGRC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 21.70%, which is quite impressive.
MGRC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.21% yearly.
MGRC shows a small growth in Revenue. In the last year, the Revenue has grown by 7.32%.
MGRC shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.82% yearly.
EPS 1Y (TTM)21.7%
EPS 3Y8.9%
EPS 5Y4.21%
EPS Q2Q%112.96%
Revenue 1Y (TTM)7.32%
Revenue growth 3Y13.88%
Revenue growth 5Y9.82%
Sales Q2Q%4.04%
3.2 Future
The Earnings Per Share is expected to grow by 17.90% on average over the next years. This is quite good.
The Revenue is expected to grow by 4.59% on average over the next years.
EPS Next Y27.87%
EPS Next 2Y17.9%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year3.67%
Revenue Next 2Y4.59%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
MGRC is valuated rather expensively with a Price/Earnings ratio of 21.44.
Compared to the rest of the industry, the Price/Earnings ratio of MGRC is on the same level as its industry peers.
MGRC is valuated rather cheaply when we compare the Price/Earnings ratio to 26.86, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 17.37, the valuation of MGRC can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MGRC is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of MGRC to the average of the S&P500 Index (21.43), we can say MGRC is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.44 | ||
| Fwd PE | 17.37 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MGRC indicates a somewhat cheap valuation: MGRC is cheaper than 62.50% of the companies listed in the same industry.
MGRC's Price/Free Cash Flow ratio is rather cheap when compared to the industry. MGRC is cheaper than 83.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.71 | ||
| EV/EBITDA | 10.18 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
MGRC has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as MGRC's earnings are expected to grow with 17.90% in the coming years.
PEG (NY)0.77
PEG (5Y)5.09
EPS Next 2Y17.9%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.70%, MGRC has a reasonable but not impressive dividend return.
MGRC's Dividend Yield is a higher than the industry average which is at 3.41.
Compared to the average S&P500 Dividend Yield of 2.43, MGRC is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.7% |
5.2 History
The dividend of MGRC has a limited annual growth rate of 5.43%.
MGRC has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of MGRC decreased recently.
Dividend Growth(5Y)5.43%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
19.85% of the earnings are spent on dividend by MGRC. This is a low number and sustainable payout ratio.
MGRC's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP19.85%
EPS Next 2Y17.9%
EPS Next 3YN/A
116.63
+1.92 (+1.67%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners90.04%
Inst Owner Change1.55%
Ins Owners1.37%
Ins Owner Change7.22%
Market Cap2.87B
Analysts85
Price Target146.88 (25.94%)
Short Float %2.21%
Short Ratio3.75
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.7% |
Yearly Dividend1.91
Dividend Growth(5Y)5.43%
DP19.85%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)11.02%
Min EPS beat(2)4.19%
Max EPS beat(2)17.85%
EPS beat(4)2
Avg EPS beat(4)-16.04%
Min EPS beat(4)-52.07%
Max EPS beat(4)17.85%
EPS beat(8)4
Avg EPS beat(8)-8.56%
EPS beat(12)7
Avg EPS beat(12)-6.36%
EPS beat(16)8
Avg EPS beat(16)-6.13%
Revenue beat(2)1
Avg Revenue beat(2)-1.07%
Min Revenue beat(2)-3.22%
Max Revenue beat(2)1.08%
Revenue beat(4)2
Avg Revenue beat(4)2.96%
Min Revenue beat(4)-3.22%
Max Revenue beat(4)14.83%
Revenue beat(8)6
Avg Revenue beat(8)4.21%
Revenue beat(12)8
Avg Revenue beat(12)1.6%
Revenue beat(16)9
Avg Revenue beat(16)0.26%
PT rev (1m)-1.14%
PT rev (3m)-1.59%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.35%
EPS NY rev (1m)0%
EPS NY rev (3m)1.71%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.26%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.44 | ||
| Fwd PE | 17.37 | ||
| P/S | 3.12 | ||
| P/FCF | 12.71 | ||
| P/OCF | 7.78 | ||
| P/B | 2.53 | ||
| P/tB | 3.77 | ||
| EV/EBITDA | 10.18 |
EPS(TTM)5.44
EY4.66%
EPS(NY)6.71
Fwd EY5.76%
FCF(TTM)9.17
FCFY7.87%
OCF(TTM)14.99
OCFY12.85%
SpS37.32
BVpS46.18
TBVpS30.94
PEG (NY)0.77
PEG (5Y)5.09
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.57% | ||
| ROE | 20.86% | ||
| ROCE | 10.76% | ||
| ROIC | 8% | ||
| ROICexc | 8.01% | ||
| ROICexgc | 9.76% | ||
| OM | 24.54% | ||
| PM (TTM) | 25.81% | ||
| GM | 47.75% | ||
| FCFM | 24.58% |
ROA(3y)8.26%
ROA(5y)7.68%
ROE(3y)17.88%
ROE(5y)16.17%
ROIC(3y)7.67%
ROIC(5y)7.89%
ROICexc(3y)7.68%
ROICexc(5y)7.89%
ROICexgc(3y)9.14%
ROICexgc(5y)9.05%
ROCE(3y)10.32%
ROCE(5y)10.61%
ROICexcg growth 3Y7.29%
ROICexcg growth 5Y2.3%
ROICexc growth 3Y5.15%
ROICexc growth 5Y-1.08%
OM growth 3Y5.79%
OM growth 5Y0.79%
PM growth 3Y20.49%
PM growth 5Y8.42%
GM growth 3Y1.61%
GM growth 5Y0.47%
F-Score6
Asset Turnover0.41
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 2.48 | ||
| Debt/EBITDA | 1.68 | ||
| Cap/Depr | 134.12% | ||
| Cap/Sales | 15.58% | ||
| Interest Coverage | 5.21 | ||
| Cash Conversion | 111.08% | ||
| Profit Quality | 95.22% | ||
| Current Ratio | 1.56 | ||
| Quick Ratio | 1.44 | ||
| Altman-Z | 2.96 |
F-Score6
WACC10.02%
ROIC/WACC0.8
Cap/Depr(3y)216.69%
Cap/Depr(5y)173.54%
Cap/Sales(3y)28.76%
Cap/Sales(5y)24.62%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)21.7%
EPS 3Y8.9%
EPS 5Y4.21%
EPS Q2Q%112.96%
EPS Next Y27.87%
EPS Next 2Y17.9%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)7.32%
Revenue growth 3Y13.88%
Revenue growth 5Y9.82%
Sales Q2Q%4.04%
Revenue Next Year3.67%
Revenue Next 2Y4.59%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y12.88%
EBIT growth 3Y20.47%
EBIT growth 5Y10.69%
EBIT Next Year55.05%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y438.49%
FCF growth 3Y23.21%
FCF growth 5Y77.11%
OCF growth 1Y106.75%
OCF growth 3Y24.14%
OCF growth 5Y14.77%