Financial Survey: Ryder System (R) and Avis Budget Group (CAR)

Ryder System (NYSE: R) and Avis Budget Group (NASDAQ:CAR) are both mid-cap transportation companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, valuation, dividends, institutional ownership and earnings.

Profitability

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This table compares Ryder System and Avis Budget Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ryder System 10.78% 10.47% 2.15%
Avis Budget Group 4.08% 76.64% 1.25%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Ryder System and Avis Budget Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ryder System 0 4 4 0 2.50
Avis Budget Group 2 3 6 0 2.36

Ryder System currently has a consensus target price of $86.29, indicating a potential upside of 18.54%. Avis Budget Group has a consensus target price of $36.67, indicating a potential downside of 21.72%. Given Ryder System’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Ryder System is more favorable than Avis Budget Group.

Insider and Institutional Ownership

93.4% of Ryder System shares are held by institutional investors. 2.3% of Ryder System shares are held by company insiders. Comparatively, 2.8% of Avis Budget Group shares are held by company 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.

Earnings and Valuation

This table compares Ryder System and Avis Budget Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ryder System $7.33 billion 0.53 $790.55 million $4.53 16.07
Avis Budget Group $8.85 billion 0.43 $361.00 million $2.85 16.44

Ryder System has higher earnings, but lower revenue than Avis Budget Group. Ryder System is trading at a lower price-to-earnings ratio than Avis Budget Group, indicating that it is currently the more affordable of the two stocks.

Dividends

Ryder System pays an annual dividend of $2.08 per share and has a dividend yield of 2.9%. Avis Budget Group does not pay a dividend. Ryder System pays out 45.9% of its earnings in the form of a dividend. Ryder System has increased its dividend for 9 consecutive years.

Volatility & Risk

Ryder System has a beta of 1.52, meaning that its share price is 52% more volatile than the S&P 500. Comparatively, Avis Budget Group has a beta of 2.34, meaning that its share price is 134% more volatile than the S&P 500.

Summary

Ryder System beats Avis Budget Group on 10 of the 17 factors compared between the two stocks.

About Ryder System

Ryder System, Inc. is engaged in offering transportation and supply chain management solutions. The Company operates through three segments: Fleet Management Solutions (FMS), which provides leasing, commercial rental, contract maintenance, and contract-related maintenance of trucks, tractors and trailers to customers principally in the United States, Canada and the United Kingdom; Dedicated Transportation Solutions (DTS), which provides vehicles and drivers as part of a dedicated transportation solution in the United States, and Supply Chain Solutions (SCS), which provides supply chain solutions, including distribution and transportation services in North America and Asia. Through its FMS business, the Company provides its customers with various fleet solutions. In addition, it provides its customers to purchase a selection of used trucks, tractors and trailers through its used vehicle sales program. Its customer base includes enterprises operating in various industries.

About Avis Budget Group

Avis Budget Group Inc. is a provider of vehicle rental and car sharing services. The Company operates three brands, which include Avis, Budget and Zipcar. Avis and Budget are a rental car supplier. It also owns Payless, which a car rental brand; Apex, which is a car rental brand in New Zealand and Australia; Maggiore, a vehicle rental brand in Italy, and France Cars, which operates light commercial vehicle fleets in France. The Company operates in two segments: Americas and International. The Americas segment provides and licenses the Company’s brands to third parties for vehicle rentals and ancillary products and services in North America, South America, Central America and the Caribbean, and operates its car sharing business in certain of these markets. The International segment provides and licenses the Company’s brands to third parties for vehicle rentals and ancillary products and services in Europe, the Middle East, Africa, Asia, Australia and New Zealand.

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