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Should Value Investors Buy United Rentals (URI) Stock?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is United Rentals (URI - Free Report) . URI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 14.82, which compares to its industry's average of 17.87. Over the past year, URI's Forward P/E has been as high as 17.45 and as low as 10.11, with a median of 13.56.

Investors should also note that URI holds a PEG ratio of 1.10. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. URI's PEG compares to its industry's average PEG of 1.49. Over the past 52 weeks, URI's PEG has been as high as 2.35 and as low as 0.84, with a median of 1.11.

Finally, investors should note that URI has a P/CF ratio of 8.44. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 21.86. URI's P/CF has been as high as 8.85 and as low as 3.21, with a median of 5.61, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that United Rentals is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, URI feels like a great value stock at the moment.


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