#7 - United Rentals (NYSE:URI)
The last infrastructure stock we’re looking at is United Rentals (NYSE:URI). With the economy still in recovery mode, companies will be likely to rent equipment rather than buying. Enter United Rentals, the world’s largest equipment rental company with approximately 13% market share in the North American rental market.
United Rentals has not been unfazed by the Covid-19 pandemic. After a record $9.3 billion in revenue during 2019, the company will take a step back this year. And even on a sequential basis, the company’s revenue dipped from $1.94 to $1.86 billion.
However, this is a time when you have to look at the company’s historical performance. Between 2009 and 2019, United Rental’s revenue grew at a compound annual growth rate of nearly 15% (14.8%). That suggests that once business conditions improve, the company will be right back to growth.
Despite the ups and downs, URI stock is up 19% for the year, with most of that growth taking place since August.
About United Rentals
United Rentals, Inc, through its subsidiaries, operates as an equipment rental company. It operates in two segments, General Rentals and Specialty. The General Rentals segment rents general construction and industrial equipment includes backhoes, skid-steer loaders, forklifts, earthmoving equipment, and material handling equipment; aerial work platforms, such as boom and scissor lifts; and general tools and light equipment comprising pressure washers, water pumps, and power tools for construction and industrial companies, manufacturers, utilities, municipalities, homeowners, and government entities.
Read More - Current Price
- $741.70
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 10 Buy Ratings, 3 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $805.25 (8.6% Upside)
Infrastructure takes many forms. There are the well-known “hard assets” like roads and bridges. The emerging 5G technology brings with it significant advances in the growth of our nation’s telecommunications industry. Not to mention the improvements that are needed to fulfill the promise of electric vehicles.
And then there’s the water and sewer infrastructure. The American Society of Civil Engineers forecasts the U.S. needs to invest $3.6 trillion into the infrastructure to get water and sewer pipes to acceptable levels.
Simply put, there’s an urgent need for action, and now that the election noise is over, infrastructure will likely draw the attention of our nation’s leaders. As an investor, infrastructure stocks may be one of the smart ways to play your transition from a Trump administration to a Biden administration. And if you’re already into some of these stocks, now may be a time to add to your positions before these stocks get more expensive.
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