United Rentals Inc (URI): Today's Featured Diversified Services Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

United Rentals ( URI) pushed the Diversified Services industry lower today making it today's featured Diversified Services laggard. The industry as a whole closed the day down 1.1%. By the end of trading, United Rentals fell $1.73 (-4%) to $40.94 on average volume. Throughout the day, 2.5 million shares of United Rentals exchanged hands as compared to its average daily volume of three million shares. The stock ranged in price between $40.88-$42.89 after having opened the day at $42.50 as compared to the previous trading day's close of $42.67. Other companies within the Diversified Services industry that declined today were: China HGS Real Estate ( HGSH), down 17%, PDI ( PDII), down 15.3%, Cardtronics ( CATM), down 11.2%, and ExlService Holdings ( EXLS), down 10.9%.
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United Rentals, Inc., through its subsidiaries, operates as an equipment rental company. It offers approximately 3,000 classes of equipment for rent to customers comprising construction and industrial companies, manufacturers, utilities, municipalities, homeowners, and government entities. United Rentals has a market cap of $3.76 billion and is part of the services sector. The company has a P/E ratio of 54.2, above the S&P 500 P/E ratio of 17.7. Shares are up 37.6% year to date as of the close of trading on Thursday. Currently there are eight analysts that rate United Rentals a buy, no analysts rate it a sell, and one rates it a hold.

TheStreet Ratings rates United Rentals as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and weak operating cash flow.

On the positive front, Grand Canyon Education ( LOPE), up 13.1%, Industrial Services of America ( IDSA), up 11.1%, ICF International ( ICFI), up 9.4%, and WidePoint Corporation ( WYY), up 9.1%, were all gainers within the diversified services industry with Fidelity National Information Services ( FIS) being today's featured diversified services industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the diversified services industry could consider iShares Dow Jones US Cons Services ( IYC) while those bearish on the diversified services industry could consider ProShares Ultra Short Consumer Sers ( SCC).

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