Critical Review: Custom Truck One Source (NYSE:CTOS) & Willis Lease Finance (NASDAQ:WLFC)

Custom Truck One Source (NYSE:CTOS) and Willis Lease Finance (NASDAQ:WLFC) are both industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Institutional and Insider Ownership

90.1% of Custom Truck One Source shares are owned by institutional investors. Comparatively, 93.7% of Willis Lease Finance shares are owned by institutional investors. 4.7% of Custom Truck One Source shares are owned by insiders. Comparatively, 53.3% of Willis Lease Finance shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Custom Truck One Source and Willis Lease Finance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Custom Truck One Source	1.05%	2.66%	0.61%
Willis Lease Finance	11.80%	14.11%	2.64%

Volatility and Risk

Custom Truck One Source has a beta of 1.43, indicating that its stock price is 43% more volatile than the S&P 500. Comparatively, Willis Lease Finance has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500.

Earnings and Valuation

This table compares Custom Truck One Source and Willis Lease Finance”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Custom Truck One Source	$1.94 billion	1.07	-$31.05 million	$0.09	102.06
Willis Lease Finance	$765.37 million	1.06	$113.76 million	$3.99	9.64

Willis Lease Finance has lower revenue, but higher earnings than Custom Truck One Source. Willis Lease Finance is trading at a lower price-to-earnings ratio than Custom Truck One Source, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Custom Truck One Source and Willis Lease Finance, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Custom Truck One Source	1	3	4	0	2.38
Willis Lease Finance	0	2	1	1	2.75

Custom Truck One Source currently has a consensus price target of $12.00, suggesting a potential upside of 30.65%. Willis Lease Finance has a consensus price target of $75.50, suggesting a potential upside of 96.36%. Given Willis Lease Finance’s stronger consensus rating and higher probable upside, analysts clearly believe Willis Lease Finance is more favorable than Custom Truck One Source.

Summary

Willis Lease Finance beats Custom Truck One Source on 10 of the 15 factors compared between the two stocks.

About Custom Truck One Source

Custom Truck One Source, Inc. provides specialty equipment rental and sale services to the electric utility transmission and distribution, telecommunications, rail, forestry, waste management, and other infrastructure-related industries in the United States and Canada. The company operates through three segments: Equipment Rental Solutions (ERS), Truck and Equipment Sales (TES), and Aftermarket Parts and Services (APS). The ERS segment owns new and used specialty equipment, including truck-mounted aerial lifts, cranes, service trucks, dump trucks, trailers, digger derricks, and other machinery and equipment. The TES segment offers new equipment for sale to be used for end-markets, which can be modified to meet customers specific needs. The APS segment provides truck and equipment maintenance and repair services; and rents and sells specialized tools, including stringing blocks, insulated hot stick, and rigging equipment, as well as sale of specialized aftermarket parts. The company was formerly known as Nesco Holdings, Inc. and changed its name to Custom Truck One Source, Inc. in April 2021. Custom Truck One Source, Inc. was founded in 1988 and is headquartered in Kansas City, Missouri.

About Willis Lease Finance

Willis Lease Finance Corporation operates as a lessor and servicer of commercial aircraft and aircraft engines worldwide. The company operates through two segments, Leasing and Related Operations, and Spare Parts Sales. The Leasing and Related Operations segment engages in acquiring and leasing commercial aircraft, aircraft engines, and other aircraft equipment, as well as the purchase and resale of commercial aircraft engines and other aircraft equipment, and other related businesses. The Spare Parts Sales segment purchases and resells after-market engine parts, whole engines, engine modules, and portable aircraft components. The company also focuses on engine management and consulting business. It serves commercial aircraft operators, as well as maintenance, repair, and overhaul organizations. As of December 31, 2023, it had a total lease portfolio of 337 engines, 12 aircraft, one marine vessel, and other leased parts and equipment, and with 74 lessees in 42 countries; and managed a total lease portfolio of 198 engines, aircraft, and related equipment for other parties. The company was founded in 1985 and is headquartered in Coconut Creek, Florida.