The company initiated a quarterly dividend of $1.48 per share and plans to restart its share repurchase program to buy back $1.0 billion of common stock in 2023.
United Rentals, Inc. (URI) is a leading North American provider of equipment rental solutions. It is headquartered in Stamford, Connecticut, and operates through a network of over 900 rental locations across the US and Canada. The company provides its customers with access to a broad range of equipment, tools, and services, including construction and industrial equipment, general tools and equipment, and Trench Safety. For those who are less familiar, Trench Safety is a specialized service provided by United Rentals (URI) for the construction and infrastructure industries. It involves the rental of equipment and services related to the excavation and shoring of trenches and other confined spaces. This includes products such as trench boxes, shoring systems, hydraulic shoring, and aluminum hydraulic shoring systems. Trench Safety is an important aspect of construction safety as it helps to protect workers and prevent accidents in trenches and other hazardous work environments. The goal of Trench Safety is to ensure the safety and well-being of workers and minimize the risk of injury or property damage.
One of the major challenges that URI faces is the cyclical nature of the construction and industrial equipment rental market. The demand for equipment rental services is directly tied to the level of construction activity, which can be subject to fluctuations. Investors considering URI stock should be aware of the cyclical nature of the market and the potential impact that fluctuations in construction activity could have on the company's financial performance. Additionally, increased competition in the market has also put pressure on the company's pricing and profitability. Despite these challenges, URI has demonstrated its ability to navigate difficult market conditions and maintain its position as a leading player in the equipment rental industry. The company has a strong balance sheet and a solid financial track record, with consistent revenue growth and profitability. Additionally, URI has made strategic acquisitions over the years, which have allowed it to expand its product offerings and increase its market share.
URI Announces Dividend in 4Q22 Report
On January 25, 2023, United Rentals announced its Q4 2022 financial results and full-year results for the year 2022. The company reported a net income of $639 million and an adjusted EBITDA of $1.647 billion. For 2023, the company expects total revenue to be between $13.7 billion to $14.2 billion and adjusted EBITDA to be between $6.6 billion to $6.85 billion. The company also announced the initiation of a quarterly dividend of $1.48 per share and its plan to restart its share repurchase program with the intention of buying back $1.0 billion in 2023.
United Rentals reported total revenue of $3.296 billion, including rental revenue of $2.747 billion, a record increase of 18.8% YoY. The company's fleet productivity increased 5.9% YoY, while average original equipment cost (OEC) increased 14.2%. This growth was driven by broad-based demand across the end markets served by the company, as well as the impact of the December 2022 acquisition of Ahern Rentals. Net income for the quarter was $639 million, with a net income margin of 19.4%, a record for the company excluding the fourth quarter of 2017, which included a one-time benefit from the Tax Cuts and Jobs Act of 2017.
The CEO of United Rentals, Matthew Flannery, stated that the company is positioned to raise the bar again in 2023 with its strong combination of people, processes, and technology, and the integration of Ahern Rentals on track.
“Our fourth quarter results capped an outstanding year, during which we set records for revenue, profitability, margins and returns. These achievements are a testament to our team’s commitment to our customers. With the Ahern integration on track, and a world-class combination of people, process and technology, we’re positioned to raise the bar again in 2023.”
- Matthew Flannery, CEO
In 2023, the company expects to have total revenue between $13.7 billion to $14.2 billion and adjusted EBITDA between $6.6 billion to $6.85 billion. The company also plans to spend $2.0 billion to $2.25 billion on net rental capital expenditures after gross purchases of $3.3 billion to $3.55 billion. The company intends to return approximately $1.4 billion of cash to shareholders through its dividend program and share repurchase program. Reflecting the strength and resiliency of the company's operating model and its ability to generate cash across the cycle, the company initiated a quarterly dividend of $1.48 per share, equating to an initial annualized yield of approximately 1.5%.
Recognized For Doing The Right Things Well
United Rentals, the largest equipment rental company, has been included on the Wall Street Journal Management Top 250 list, a prestigious ranking that recognizes companies for their effectiveness in customer satisfaction, employee engagement and development, innovation, social responsibility, and financial strength. The ranking was developed by the Drucker Institute and evaluated 902 publicly traded companies based on 34 data inputs from 14 third-party sources. CEO Matt Flannery expressed pride in the recognition, which is part of a series of awards and accolades United Rentals has received in the past year, including recognition for being a responsible and just company and a Gold Military Friendly Employer.
AI Trading
Our subscribers get exclusive market insights based on artificial intelligence and are updated daily about the best market opportunities before they happen. Overall, URI stock has been a strong performer recently and has demonstrated significant potential for future growth.
Below is our stock pick from our three-month stock forecast announcing URI as a buy on November 10th, 2022. This stock pick has been available in multiple forecasts continuously over various time frames. As a subscriber, when you view your forecasts published daily, you can recognize better opportunities by looking for repetition of certain stock picks repeatedly remaining in the AI forecasts. Another indicator is when you see the stock pick appear in multiple forecasted time frames, especially over multiple forecasts published each morning EST.
When combined with machine learning, these incredibly intricate mathematical functions for statistical programming and modeling are capable of comparing their current coefficients and algorithms to newly added data and then adapting to improve the models' accuracy through a process of validation and reflection.
The AI-powered stock market analysis computes the Signal Confidence (SC), which is expressed as a percentage out of 100%, based on the historical accuracy of each previous financial asset prediction, as well as current market factors relevant to stock pricing. The Signal Confidence (SC) in this stock forecast is 80%.
You can improve decision-making, outcome modeling and forecasting, and market information by combining big data analytics with our AI-powered stock prediction system. The main advantage of using AI for stock market analysis is that it can examine more assets objectively and continuously at all times of the day guiding you on how to make a profit even when the markets are as bearish as they are these days. The AI stock prediction system analyzes empirical data on financial market irregularities linked to trader overreaction and underreaction to produce circadian forecasts in various frames. Every day, you will be updated with the best potential stock opportunities identified by AI that are offered from short-term to longer-term time frames.
As a general rule of thumb, longer-term predictions tend to be much more accurate and the profits generated tend to be more substantial making our AI trading signals ideal for value-based investors. Subscribers who bought URI stock based on our quarterly AI stock prediction on November 10th, 2022 generated a profit of 41.04%.
Stock Ticker | Open: Nov 10, 2022 | Close: Jan 8th, 2023 | ROI% |
United Rentals, Inc. (URI) | $324.77 | $458.04 | 41.04% |
While this stock was available in our Top 10 package, we advise a larger forecast because it provides much more market coverage, makes it much easier to follow trends, and of course, you will certainly find A LOT more market opportunities. Click here to see the original forecast published on November 10th, 2022. Discretion should always be used when analyzing the market. Your own due diligence is always required and you should always get advice from a licensed & certified financial counselor prior to implementing any financial plans.
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Sources: 1. United Rentals Investor Relations, "United Rentals Announces Record Fourth Quarter and Full-Year1 2022Results, Introduces 2023 Outlook, Dividend Program and Restart of Share Repurchase Program" (2023)
2. United Rentals Investor Relations, "United Rentals Named One of America’s Best-Managed Companies" (2023)
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