Contrasting Herc (HRI) & Fly Leasing (FLY)

Herc (NYSE: HRI) and Fly Leasing (NYSE:FLY) are both small-cap transportation companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitability.

Analyst Ratings

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This is a summary of recent recommendations for Herc and Fly Leasing, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Herc 0 3 4 0 2.57
Fly Leasing 2 0 3 0 2.20

Herc currently has a consensus price target of $59.60, indicating a potential downside of 8.65%. Fly Leasing has a consensus price target of $15.88, indicating a potential upside of 17.16%. Given Fly Leasing’s higher probable upside, analysts plainly believe Fly Leasing is more favorable than Herc.

Volatility & Risk

Herc has a beta of 2.35, suggesting that its stock price is 135% more volatile than the S&P 500. Comparatively, Fly Leasing has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500.

Insider and Institutional Ownership

96.4% of Herc shares are held by institutional investors. Comparatively, 45.3% of Fly Leasing shares are held by institutional investors. 0.5% of Herc shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Herc and Fly Leasing’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Herc 9.14% -0.88% -0.08%
Fly Leasing 0.74% 2.74% 0.44%

Valuation & Earnings

This table compares Herc and Fly Leasing’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Herc $1.75 billion 1.06 $160.30 million ($0.32) -203.88
Fly Leasing $353.25 million 1.10 $2.59 million $0.09 150.56

Herc has higher revenue and earnings than Fly Leasing. Herc is trading at a lower price-to-earnings ratio than Fly Leasing, indicating that it is currently the more affordable of the two stocks.

Summary

Herc beats Fly Leasing on 8 of the 14 factors compared between the two stocks.

Herc Company Profile

Herc Holdings Inc., together with its subsidiaries, operates as an equipment rental supplier. It rents aerial, earthmoving, material handling, trucks and trailers, air compressors, compaction, and lighting equipment, as well as generators, and safety supplies and expendables; and provides ProSolutions, an industry specific solution based services, such as pumping solutions, power generation, climate control, remediation and restoration, and studio and production equipment. The company also sells used equipment and contractor supplies, such as construction consumables, tools, small equipment, and safety supplies; provides repair, maintenance, equipment management, and safety training services, as well as offers ancillary services, such as equipment transport, rental protection, cleaning, refueling, and labor. It serves non-residential and residential construction, specialty trade, restoration, remediation and environment, and facility maintenance contractors; industrial manufacturing industries, including automotive and aerospace, power, metals and mining, agriculture, pulp, paper and wood, food and beverage, and refineries and petrochemical industries; infrastructure and government sectors; and commercial and retail service, hospitality, healthcare, recreation, entertainment production, and special event management customers through its sales team, industry catalogs, as well as through participation and sponsorship of industry events, trade shows, and Internet. As of December 31, 2017, it operated approximately 275 locations in the United States, Canada, China, the United Kingdom, Saudi Arabia, and Qatar. Herc Holdings Inc. is based in Bonita Springs, Florida.

Fly Leasing Company Profile

Fly Leasing Limited, through its subsidiaries, purchases and leases commercial aircrafts under multi-year contracts to various airlines worldwide. As of December 31, 2017, the company had a portfolio of 85 aircrafts, including 73 narrow-body passenger aircrafts and 12 wide-body passenger aircrafts. Fly Leasing Limited was founded in 2007 and is headquartered in Dún Laoghaire, Ireland.

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