MCGRATH RENTCORP (MGRC) Stock Fundamental Analysis
NASDAQ:MGRC - Nasdaq - US5805891091 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to MGRC. MGRC was compared to 49 industry peers in the Trading Companies & Distributors industry. While MGRC has a great profitability rating, there are some minor concerns on its financial health. MGRC is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year MGRC was profitable.
In the past year MGRC had a positive cash flow from operations.
Each year in the past 5 years MGRC has been profitable.
MGRC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
MGRC's Return On Assets of 10.17% is amongst the best of the industry. MGRC outperforms 83.67% of its industry peers.
With an excellent Return On Equity value of 20.63%, MGRC belongs to the best of the industry, outperforming 81.63% of the companies in the same industry.
MGRC's Return On Invested Capital of 7.54% is in line compared to the rest of the industry. MGRC outperforms 55.10% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MGRC is in line with the industry average of 8.96%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.17% | ||
| ROE | 20.63% | ||
| ROIC | 7.54% |
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
MGRC has a better Profit Margin (25.44%) than 97.96% of its industry peers.
In the last couple of years the Profit Margin of MGRC has grown nicely.
With an excellent Operating Margin value of 23.41%, MGRC belongs to the best of the industry, outperforming 89.80% of the companies in the same industry.
In the last couple of years the Operating Margin of MGRC has remained more or less at the same level.
MGRC has a better Gross Margin (47.80%) than 83.67% of its industry peers.
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 | 23.41% | ||
| PM (TTM) | 25.44% | ||
| GM | 47.8% |
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
The debt/assets ratio for MGRC has been reduced compared to a year ago.
2.2 Solvency
MGRC has an Altman-Z score of 2.73. 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.
With a Altman-Z score value of 2.73, MGRC perfoms like the industry average, outperforming 48.98% of the companies in the same industry.
MGRC has a debt to FCF ratio of 4.13. This is a neutral value as MGRC would need 4.13 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 4.13, MGRC is in the better half of the industry, outperforming 65.31% of the companies in the same industry.
MGRC has a Debt/Equity ratio of 0.53. This is a neutral value indicating MGRC is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.53, MGRC perfoms like the industry average, outperforming 57.14% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 4.13 | ||
| Altman-Z | 2.73 |
ROIC/WACC0.78
WACC9.62%
2.3 Liquidity
MGRC has a Current Ratio of 1.35. This is a normal value and indicates that MGRC is financially healthy and should not expect problems in meeting its short term obligations.
MGRC has a worse Current ratio (1.35) than 71.43% of its industry peers.
A Quick Ratio of 1.26 indicates that MGRC should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.26, MGRC is in line with its industry, outperforming 48.98% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.35 | ||
| Quick Ratio | 1.26 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 21.70% over the past year.
Measured over the past 5 years, MGRC shows a small growth in Earnings Per Share. The EPS has been growing by 4.21% on average per year.
Looking at the last year, MGRC shows a quite strong growth in Revenue. The Revenue has grown by 9.51% in the last year.
The Revenue has been growing by 9.82% on average over the past years. This is quite good.
EPS 1Y (TTM)21.7%
EPS 3Y8.9%
EPS 5Y4.21%
EPS Q2Q%112.96%
Revenue 1Y (TTM)9.51%
Revenue growth 3Y13.88%
Revenue growth 5Y9.82%
Sales Q2Q%4.04%
3.2 Future
MGRC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 17.88% yearly.
Based on estimates for the next years, MGRC will show a small growth in Revenue. The Revenue will grow by 4.64% on average per year.
EPS Next Y25.72%
EPS Next 2Y17.88%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year4.04%
Revenue Next 2Y4.64%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
A Price/Earnings ratio of 19.74 indicates a rather expensive valuation of MGRC.
MGRC's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 27.75. MGRC is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 16.00 indicates a correct valuation of MGRC.
61.22% of the companies in the same industry are more expensive than MGRC, based on the Price/Forward Earnings ratio.
MGRC is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 20.49, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.74 | ||
| Fwd PE | 16 |
4.2 Price Multiples
MGRC's Enterprise Value to EBITDA is on the same level as the industry average.
MGRC's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. MGRC is cheaper than 73.47% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.49 | ||
| EV/EBITDA | 10.08 |
4.3 Compensation for Growth
MGRC's 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.
MGRC's earnings are expected to grow with 17.88% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.77
PEG (5Y)4.69
EPS Next 2Y17.88%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.81%, MGRC has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.07, MGRC pays a bit more dividend than its industry peers.
MGRC's Dividend Yield is slightly below the S&P500 average, which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.81% |
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
20.18% of the earnings are spent on dividend by MGRC. This is a low number and sustainable payout ratio.
The dividend of MGRC is growing, but earnings are growing more, so the dividend growth is sustainable.
DP20.18%
EPS Next 2Y17.88%
EPS Next 3YN/A
107.37
+0.7 (+0.66%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners89.08%
Inst Owner Change0.15%
Ins Owners1.31%
Ins Owner Change4.07%
Market Cap2.64B
Analysts85
Price Target149.26 (39.01%)
Short Float %1.42%
Short Ratio2.22
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.81% |
Yearly Dividend1.91
Dividend Growth(5Y)5.43%
DP20.18%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-23.94%
Min EPS beat(2)-52.07%
Max EPS beat(2)4.19%
EPS beat(4)1
Avg EPS beat(4)-27.37%
Min EPS beat(4)-52.07%
Max EPS beat(4)4.19%
EPS beat(8)3
Avg EPS beat(8)-16.4%
EPS beat(12)7
Avg EPS beat(12)-7.44%
EPS beat(16)7
Avg EPS beat(16)-7.87%
Revenue beat(2)1
Avg Revenue beat(2)5.8%
Min Revenue beat(2)-3.22%
Max Revenue beat(2)14.83%
Revenue beat(4)2
Avg Revenue beat(4)4.44%
Min Revenue beat(4)-3.22%
Max Revenue beat(4)14.83%
Revenue beat(8)6
Avg Revenue beat(8)4.24%
Revenue beat(12)7
Avg Revenue beat(12)0.15%
Revenue beat(16)8
Avg Revenue beat(16)-0.26%
PT rev (1m)0%
PT rev (3m)4.03%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.86%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.86%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.65%
Revenue NY rev (1m)0%
Revenue NY rev (3m)2.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.74 | ||
| Fwd PE | 16 | ||
| P/S | 2.9 | ||
| P/FCF | 18.49 | ||
| P/OCF | 7.06 | ||
| P/B | 2.35 | ||
| P/tB | 3.54 | ||
| EV/EBITDA | 10.08 |
EPS(TTM)5.44
EY5.07%
EPS(NY)6.71
Fwd EY6.25%
FCF(TTM)5.81
FCFY5.41%
OCF(TTM)15.21
OCFY14.17%
SpS37.02
BVpS45.65
TBVpS30.31
PEG (NY)0.77
PEG (5Y)4.69
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.17% | ||
| ROE | 20.63% | ||
| ROCE | 10.14% | ||
| ROIC | 7.54% | ||
| ROICexc | 7.54% | ||
| ROICexgc | 9.19% | ||
| OM | 23.41% | ||
| PM (TTM) | 25.44% | ||
| GM | 47.8% | ||
| FCFM | 15.69% |
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-Score7
Asset Turnover0.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 4.13 | ||
| Debt/EBITDA | 1.84 | ||
| Cap/Depr | 215.4% | ||
| Cap/Sales | 25.41% | ||
| Interest Coverage | 4.41 | ||
| Cash Conversion | 116.73% | ||
| Profit Quality | 61.67% | ||
| Current Ratio | 1.35 | ||
| Quick Ratio | 1.26 | ||
| Altman-Z | 2.73 |
F-Score7
WACC9.62%
ROIC/WACC0.78
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 Y25.72%
EPS Next 2Y17.88%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)9.51%
Revenue growth 3Y13.88%
Revenue growth 5Y9.82%
Sales Q2Q%4.04%
Revenue Next Year4.04%
Revenue Next 2Y4.64%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y14.59%
EBIT growth 3Y20.47%
EBIT growth 5Y10.69%
EBIT Next Year55.95%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y180.14%
FCF growth 3Y23.21%
FCF growth 5Y77.11%
OCF growth 1Y292.66%
OCF growth 3Y24.14%
OCF growth 5Y14.77%