H&E Equipment Services (NASDAQ: HEES) and PRA Group (NASDAQ:PRAA) are both small-cap industrial products companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, profitabiliy, risk, institutional ownership, analyst recommendations and dividends.
Earnings & Valuation
This table compares H&E Equipment Services and PRA Group’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|H&E Equipment Services||$957.96 million||0.75||$132.74 million||$1.04||19.63|
|PRA Group||$812.26 million||2.20||$305.97 million||$2.18||17.62|
PRA Group has higher revenue, but lower earnings than H&E Equipment Services. PRA Group is trading at a lower price-to-earnings ratio than H&E Equipment Services, indicating that it is currently the more affordable of the two stocks.
This table compares H&E Equipment Services and PRA Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|H&E Equipment Services||3.86%||26.41%||2.90%|
This is a summary of current ratings for H&E Equipment Services and PRA Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|H&E Equipment Services||0||0||1||0||3.00|
H&E Equipment Services currently has a consensus price target of $30.00, indicating a potential upside of 46.91%. PRA Group has a consensus price target of $38.00, indicating a potential downside of 1.09%. Given H&E Equipment Services’ higher probable upside, research analysts plainly believe H&E Equipment Services is more favorable than PRA Group.
Institutional & Insider Ownership
75.4% of H&E Equipment Services shares are held by institutional investors. 12.3% of H&E Equipment Services shares are held by insiders. Comparatively, 2.1% of PRA Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
H&E Equipment Services pays an annual dividend of $1.10 per share and has a dividend yield of 5.4%. PRA Group does not pay a dividend. H&E Equipment Services pays out 105.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Risk & Volatility
H&E Equipment Services has a beta of 2.54, indicating that its share price is 154% more volatile than the S&P 500. Comparatively, PRA Group has a beta of 1.48, indicating that its share price is 48% more volatile than the S&P 500.
H&E Equipment Services beats PRA Group on 8 of the 15 factors compared between the two stocks.
About H&E Equipment Services
H&E Equipment Services, Inc. is an integrated equipment services company. The Company is focused on heavy construction and industrial equipment. As of December 31, 2016, the Company rented, sold and provided parts and services support for four core categories of specialized equipment: hi-lift or aerial work platform equipment; cranes; earthmoving equipment, and industrial lift trucks. The Company’s principal business activities include equipment rentals; new equipment sales; used equipment sales; parts sales, and repair and maintenance services. As of February 16, 2017, the Company had 78 facilities located throughout the West Coast, Intermountain, Southwest, Gulf Coast, Southeast and Mid-Atlantic regions of the United States. The Company rents its heavy construction and industrial equipment to its customers on a daily, weekly and monthly basis. The Company sells new heavy construction and industrial equipment. The Company is a distributor of Grove and Manitowoc crane equipment.
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.
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