Financial Review: PRA Group (PRAA) vs. United Rentals (URI)

PRA Group (NASDAQ: PRAA) and United Rentals (NYSE:URI) are both large-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, earnings, institutional ownership, valuation and dividends.

Earnings and Valuation

This table compares PRA Group and United Rentals’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
PRA Group $830.58 million 1.58 $85.09 million $1.64 17.68
United Rentals $5.76 billion 2.12 $566.00 million $7.06 20.50

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

Analyst Recommendations

This is a summary of current ratings and price targets for PRA Group and United Rentals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PRA Group 3 1 0 0 1.25
United Rentals 1 5 10 0 2.56

PRA Group currently has a consensus price target of $36.00, suggesting a potential upside of 24.14%. United Rentals has a consensus price target of $144.91, suggesting a potential upside of 0.14%. Given PRA Group’s higher probable upside, equities analysts clearly believe PRA Group is more favorable than United Rentals.

Profitability

This table compares PRA Group and United Rentals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PRA Group 9.76% 4.69% 1.41%
United Rentals 9.64% 44.81% 6.66%

Institutional & Insider Ownership

93.3% of United Rentals shares are owned by institutional investors. 2.1% of PRA Group shares are owned by insiders. Comparatively, 1.2% of United Rentals shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

PRA Group has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500. Comparatively, United Rentals has a beta of 2.65, indicating that its share price is 165% more volatile than the S&P 500.

Summary

United Rentals beats PRA Group on 10 of the 14 factors compared between the two stocks.

About PRA Group

PRA Group, Inc. (PRA Group) is a financial and business services company with operations in the Americas and Europe. The Company’s primary business is the purchase, collection and management of portfolios of nonperforming loans. The Company operates through the account receivables management segment. It also provides fee-based services, such as vehicle location, skip tracing and collateral recovery for auto lenders, government entities and law enforcement; revenue administration, audit and revenue discovery/recovery services for local government entities; class action claims recovery services and purchases; servicing of consumer bankruptcy accounts in the United States, and contingent collections of nonperforming loans in Europe and South America. The Company’s portfolio of nonperforming loans includes a set of accounts that can be categorized by asset type, age and size of account, level of previous collection efforts, payment history, and geography.

About United Rentals

United Rentals, Inc. is a holding company. The Company is an equipment rental company, which operates throughout the United States and Canada. It operates through two segments: general rentals, and trench, power and pump. The general rentals segment includes the rental of construction, aerial, industrial and homeowner equipment and related services and activities. The trench, power and pump segment includes the rental of specialty construction products and related services. Its general rentals segment includes the rental of general construction and industrial equipment, such as backhoes, skid-steer loaders, forklifts and material handling equipment; aerial work platforms, such as boom lifts and scissor lifts, and general tools and light equipment, such as pressure washers, water pumps and power tools. As of January 1, 2017, it operated 887 rental locations. The Company conducts its operations through its subsidiary, United Rentals (North America), Inc. (URNA) and subsidiaries of URNA.

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