Head-To-Head Review: McGrath RentCorp (NASDAQ:MGRC) versus Titan Machinery (NASDAQ:TITN)

McGrath RentCorp (NASDAQ:MGRC) and Titan Machinery (NASDAQ:TITN) are both industrials companies, but which is the better business? We will compare the two companies based on the strength of their profitability, valuation, dividends, earnings, analyst recommendations, institutional ownership and risk.

Institutional & Insider Ownership

92.0% of McGrath RentCorp shares are held by institutional investors. Comparatively, 78.4% of Titan Machinery shares are held by institutional investors. 1.4% of McGrath RentCorp shares are held by company insiders. Comparatively, 10.8% of Titan Machinery shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations for McGrath RentCorp and Titan Machinery, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
McGrath RentCorp	0	2	1	0	2.33
Titan Machinery	1	0	1	0	2.00

McGrath RentCorp currently has a consensus price target of $140.00, suggesting a potential upside of 23.38%. Titan Machinery has a consensus price target of $29.00, suggesting a potential upside of 19.98%. Given McGrath RentCorp’s stronger consensus rating and higher probable upside, research analysts clearly believe McGrath RentCorp is more favorable than Titan Machinery.

Volatility & Risk

McGrath RentCorp has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500. Comparatively, Titan Machinery has a beta of 1.43, indicating that its share price is 43% more volatile than the S&P 500.

Earnings and Valuation

This table compares McGrath RentCorp and Titan Machinery”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
McGrath RentCorp	$944.23 million	2.94	$156.31 million	$6.21	18.27
Titan Machinery	$2.43 billion	0.23	-$54.17 million	($2.49)	-9.71

McGrath RentCorp has higher earnings, but lower revenue than Titan Machinery. Titan Machinery is trading at a lower price-to-earnings ratio than McGrath RentCorp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares McGrath RentCorp and Titan Machinery’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
McGrath RentCorp	16.38%	12.44%	6.38%
Titan Machinery	-2.46%	-9.17%	-3.20%

Summary

McGrath RentCorp beats Titan Machinery on 10 of the 13 factors compared between the two stocks.

About McGrath RentCorp

McGrath RentCorp operates as a business to business rental company in the United States and internationally. It rents and sells relocatable modular buildings, portable storage containers, and electronic test equipment. The company operates through four segments: Mobile Modular, Portable Storage, TRS-RenTelco, and Enviroplex. The Mobile Modular segment rents and sells modular buildings designed for use as classrooms, temporary offices adjacent to existing facilities, sales offices, construction field offices, restroom buildings, health care clinics, child care facilities, office spaces, and various other purposes. The TRS-RenTelco segment rents and sells general purpose electronic test equipment, such as oscilloscopes, amplifiers, analyzers, signal source, and power source test equipment primarily to aerospace, defense, electronics, industrial, research, and semiconductor industries. It also provides communications test equipment, including network and transmission test equipment for various fiber, copper, and wireless networks to the manufacturers of communications equipment and products, electrical and communications installation contractors, field technicians, and service providers. The Portable Storage segment offers steel containers to provide a temporary storage solution. The Enviroplex segment manufactures and sells portable classrooms directly to public school districts and other educational institutions in California. The company was incorporated in 1979 and is based in Livermore, California.

About Titan Machinery

Titan Machinery Inc. owns and operates a network of full service agricultural and construction equipment stores in the United States, Europe, and Australia. It operates through four segments: Agriculture, Construction, Europe, and Australia. The company sells new and used equipment, including agricultural and construction equipment manufactured under the CNH Industrial family of brands, as well as equipment from various other manufacturers. Its agricultural equipment includes machinery and attachments for use in the production of food, fiber, feed grain, feed stock, and renewable energy; and home and garden applications, as well as maintenance of commercial, residential, and government properties. The company’s construction equipment comprises heavy construction machinery, light industrial machinery for commercial and residential construction, and road and highway construction machinery. It also sells maintenance and replacement parts. In addition, the company offers repair and maintenance services that include warranty repairs, off-site and on-site repair services, scheduling off-season maintenance services, and notifying customers of periodic service requirements; and training programs to customers. Further, it rents equipment; and provides ancillary equipment support services, such as equipment transportation, global positioning system signal subscriptions and other precision farming products, farm data management products, and CNH Industrial finance and insurance products. The company operates in Colorado, Idaho, Kansas, Missouri, Washington, Iowa, Minnesota, Montana, Nebraska, North Dakota, South Dakota, Wisconsin, and Wyoming, the United States; Bulgaria, Germany, Romania, and Ukraine, Europe; and New South Wales, South Australia, and Victoria, Australia. Titan Machinery Inc. was founded in 1980 and is headquartered in West Fargo, North Dakota.