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TheStreet Open House

11 Rental-Industry Stocks Riding a Rebound (Update2)

11. Rent-A-Center (RCII)

Company profile: Rent-A-Center, with a market value of $2 billion, has about 3,000 rent-to-own stores that offer furniture, furnishings, home electronics and appliances.

Investor takeaway: Its shares are down 5.4% this year, but have a three-year, average annual return of 26%. Analysts give its shares five "buy" ratings, two "buy/holds," and four "holds," according to a survey of analysts by S&P. It's expected to earn $3.10 per share this year which would give it a price/earnings ratio of 11. Earnings per share have grown steadily over the past six years, to $2.66 per share in 2011.

10. Aaron's (AAN)

Company profile: Aaron's, with a market value of $2 billion, rents and sells residential and office furniture, consumer electronics, and home appliances. It typically features name brands.

Investor takeaway: Its shares are down 2.3 % this year but have a three-year, average annual return of 23%. Over a 15 year period they have returned 18% annually. Analysts give its shares four "buy" ratings, three "buy/holds," and five "holds," according to a survey of analysts by S&P. Revenue and profits have grown almost steadily over the past six years, to $1.43 per share last year, when it recorded huge cash flow of $2.09 per share.

9. McGrath RentCorp (MGRC)

Company profile: McGrath, with a market value of $767 million, rents and sells mobile modular offices and classrooms. It also has an electronic test equipment rental division and Adler Tank Rentals, which provides containers for the storage of hazardous and non-hazardous liquids and solids. Those tanks are in growing demand at oil and gas field drilling sites for the storage and disposal of waste water and byproducts.

Investor takeaway: Its shares are up 13% this year and have a three-year, average annual return of 28%. Analysts give its shares one "buy" rating, one "buy/hold," and one "hold," according to a survey of analysts by S&P. It's expected to earn $2.03 per share this year, which would give it a 16 price/earnings ratio.

8. Cintas (CTAS)

Company profile: Cintas, with a market value of $5 billion, rents and sells corporate identity uniforms, and provides entrance mats, cleaning services and supplies, first aid products, and document management and shredding services. It does much better in times of higher employment so will benefit from the rising economy. On Tuesday, Cintas reported that for the quarter ended Feb. 29, it earned 58 cents per share, up from 41 cents a year earlier, besting analysts' consensus estimates of 52 cents. The company also said that it now expects profit of $2.24 to $2.27 per share for the fiscal year that ends in May, up from its previous estimate of $2.16 to $2.20 per share.

Investor takeaway: Its shares are up 16% this year and have a three-year, average annual return of 22%. Analysts give its shares three "buy" ratings, four "buy/holds," five "holds," one "weak hold," and one "sell," according to a survey of analysts by S&P. It's expected to earn $2.19 per share this year, and grow by 11%, to $2.44 per share, in 2013. S&P has it rated "buy," and says: "We expect (it) will maintain its tight control over administrative expenses, and also benefit from positive operating leverage tied to improving volumes."

7. Dollar Thrifty Automotive (DTG)

Company profile: Dollar Thrifty, with a market value of $2.3 billion, owns, operates, and franchises car rental facilities throughout North America and internationally.

Investor takeaway: Its shares are up 16% this year and have a three-year, average annual return of 350%. Analysts give its shares two "buy" ratings, and four "holds," according to a survey of analysts by S&P. It's expected to earn $5.07 per share this year, and that that will grow to $5.22 next year. It had $1.5 billion in revenue last year, its best year since 2007, before the recession.

6. RSC Holdings (RRR)

Company profile: RSC, with a market value of $2.3 billion, is one of the three largest equipment rental companies in North America. Its customers are mainly nonresidential and industrial construction companies and rentals make up about 85% of total revenue.

Investor takeaway: Its shares are up 21% this year and have a three-year, average annual return of 63%. It's expected to earn 64 cents per share this year and grow that by 68% to $1.24 in 2013. RSC Holdings reached a $4.2 billion merger agreement with competitor United Rentals that was announced in December and is still pending. For that reason, analysts have its shares rated "hold."

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