Rent-A-Center (NASDAQ:RCII) and Triton International (NYSE:TRTN) are both consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, dividends, risk, earnings and valuation.
Insider and Institutional Ownership
98.1% of Rent-A-Center shares are owned by institutional investors. Comparatively, 63.4% of Triton International shares are owned by institutional investors. 0.8% of Rent-A-Center shares are owned by company insiders. Comparatively, 1.7% of Triton International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Earnings and Valuation
This table compares Rent-A-Center and Triton International's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Rent-A-Center | $2.67 billion | 0.54 | $173.55 million | $2.24 | 11.91 |
| Triton International | $1.35 billion | 1.57 | $352.69 million | $4.57 | 6.58 |
Triton International has lower revenue, but higher earnings than Rent-A-Center. Triton International is trading at a lower price-to-earnings ratio than Rent-A-Center, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Rent-A-Center has a beta of 1.55, suggesting that its stock price is 55% more volatile than the S&P 500. Comparatively, Triton International has a beta of 2.01, suggesting that its stock price is 101% more volatile than the S&P 500.
Profitability
This table compares Rent-A-Center and Triton International's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Rent-A-Center | 8.10% | 29.64% | 8.10% |
| Triton International | 25.06% | 16.00% | 3.38% |
Dividends
Rent-A-Center pays an annual dividend of $1.16 per share and has a dividend yield of 4.3%. Triton International pays an annual dividend of $2.08 per share and has a dividend yield of 6.9%. Rent-A-Center pays out 51.8% of its earnings in the form of a dividend. Triton International pays out 45.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Triton International has raised its dividend for 2 consecutive years. Triton International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Ratings
This is a summary of recent recommendations and price targets for Rent-A-Center and Triton International, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Rent-A-Center | 0 | 2 | 4 | 1 | 2.86 |
| Triton International | 0 | 2 | 1 | 0 | 2.33 |
Rent-A-Center presently has a consensus price target of $29.40, suggesting a potential upside of 10.19%. Triton International has a consensus price target of $42.00, suggesting a potential upside of 39.67%. Given Triton International's higher possible upside, analysts plainly believe Triton International is more favorable than Rent-A-Center.
Summary
Triton International beats Rent-A-Center on 11 of the 18 factors compared between the two stocks.
