Reviewing CRH (NYSE:CRH) & United Rentals (NYSE:URI)

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

Profitability

This table compares United Rentals and CRH’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Rentals	15.67%	31.93%	9.58%
CRH	9.65%	15.37%	6.48%

Risk & Volatility

United Rentals has a beta of 1.79, suggesting that its stock price is 79% more volatile than the S&P 500. Comparatively, CRH has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500.

Valuation and Earnings

This table compares United Rentals and CRH”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Rentals	$16.10 billion	4.44	$2.49 billion	$39.20	29.09
CRH	$37.45 billion	1.78	$3.73 billion	$5.40	18.52

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

Dividends

United Rentals pays an annual dividend of $7.88 per share and has a dividend yield of 0.7%. CRH pays an annual dividend of $1.56 per share and has a dividend yield of 1.6%. United Rentals pays out 20.1% of its earnings in the form of a dividend. CRH pays out 28.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. United Rentals has raised its dividend for 3 consecutive years.

Analyst Recommendations

This is a summary of current ratings and target prices for United Rentals and CRH, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Rentals	1	1	14	0	2.81
CRH	0	2	13	2	3.00

United Rentals presently has a consensus target price of $1,226.50, suggesting a potential upside of 7.57%. CRH has a consensus target price of $141.19, suggesting a potential upside of 41.20%. Given CRH’s stronger consensus rating and higher probable upside, analysts clearly believe CRH is more favorable than United Rentals.

Institutional and Insider Ownership

96.3% of United Rentals shares are owned by institutional investors. Comparatively, 62.5% of CRH shares are owned by institutional investors. 0.5% of United Rentals shares are owned by insiders. Comparatively, 0.1% of CRH 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.

Summary

United Rentals beats CRH on 12 of the 18 factors compared between the two stocks.

About United Rentals

United Rentals, Inc., through its subsidiaries, operates as an equipment rental company. It operates in two segments, General Rentals and Specialty. The General Rentals segment rents general construction and industrial equipment includes backhoes, skid-steer loaders, forklifts, earthmoving equipment, and material handling equipment; aerial work platforms, such as boom and scissor lifts; and general tools and light equipment comprising pressure washers, water pumps, and power tools for construction and industrial companies, manufacturers, utilities, municipalities, homeowners, and government entities. The specialty segment rents specialty construction products, including trench safety equipment consists of trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers, and line testing equipment for underground work; power and heating, ventilating, and air conditioning equipment, such as portable diesel generators, electrical distribution equipment, and temperature control equipment; fluid solutions equipment for fluid containment, transfer, and treatment; and mobile storage equipment and modular office space. This segment serves construction companies involved in infrastructure projects, and municipalities and industrial companies. It also sells aerial lifts, reach forklifts, telehandlers, compressors, and generators; construction consumables, tools, small equipment, and safety supplies; and parts for equipment that is owned by its customers, as well as provides repair and maintenance services. The company sells used equipment through its sales force, brokers, website, at auctions, and directly to manufacturers. The company operates in the United States, Canada, Europe, Australia, and New Zealand. United Rentals, Inc. was incorporated in 1997 and is headquartered in Stamford, Connecticut.

About CRH

CRH plc, together with its subsidiaries, provides building materials solutions in Ireland and internationally. It operates through four segments: Americas Materials Solutions, Americas Building Solutions, Europe Materials Solutions, and Europe Building Solutions. The company provides solutions for the construction and maintenance of public infrastructure and commercial and residential buildings; and produces and sells aggregates, cement, readymixed concrete, and asphalt, as well as provides paving and construction services. It also manufactures, supplies, and delivers solutions for the built environment in communities across North America; and offers building and infrastructure solutions serving complex critical utility infrastructure, such as water, energy, transportation, and telecommunications projects, and outdoor living solutions for enhancing private and public spaces. In addition, the company combines materials, products, and services to produce a wide range of architectural and infrastructural solutions for use in the building and renovation of critical utility infrastructure, commercial and residential buildings, and outdoor living spaces for the built environment. Further, it produces and supplies precast and pre-stressed concrete products comprising floor and wall elements, beams, vaults, pipes, and manholes; granite, limestone, and sandstone; concrete and polymer-based products, such as underground vaults, drainage systems, utility enclosures, and modular precast structures; engineered steel, polymer-based anchoring, fixing, and connecting solutions; concrete masonry, hardscape and related products, including pavers, blocks and curbs, retaining walls, and slabs; and fencing and railing systems, composite decking, lawn and garden products, and packaged concrete mixes. The company was founded in 1936 and is headquartered in Dublin, Ireland.