IBD 50 equipment rental giant United Rentals has hoisted itself into a new buy zone. Having recently contracted with Internet of Things leader Samsara, URI stock continues to benefit from the company's adoption of IoT technologies to efficiently meld the physical and digital worlds.
Billion-dollar acquisitions don't hurt either. Last year, United Rentals completed its $2 billion buyout of Ahern, which had been the world's largest independent equipment rental company.
Already the world's largest equipment rental company, United Rentals commands a 17% share of the North American market. Privately held peer Sunbelt Rentals Exchange holds 13% of the market. Herc has 4% market share.
United Rentals has a network of 1,465 rental locations in North America, 14 in Europe, 27 in Australia and 19 in New Zealand. In North America, the equipment rental leader operates in 49 states and every Canadian province. The company's roughly 25,000 employees serve construction and industrial customers, utilities, municipalities, homeowners and more.
In addition to earning placement on the IBD 50 list of top growth stocks, United Rentals has also landed a spot on IBD Leaderboard.
United Rentals Drives Growth With IoT Digital Transformation
Including contracting with industrial Samsara earlier this year, United Rentals continues to expand its integration of IoT technologies, giving customers for its equipment rentals real-time account and equipment telematics info. Desktop access to the data comes through its Total Control system, while the United Rentals app powers mobile access. The industry powerhouse also conducts safety training and manages certifications through its United Academy.
Last year, the company generated a 45% year-over-year increase in revenue on UR.com.
In Q2, total revenue for the company rose 28% over the prior-year quarter to just under $3.6 billion. Reflecting its solid and steady double-digit sales growth, United Rentals has generated average annual revenue gains of 16% over the last three years.
On the earnings front, United Rentals has produced average annual EPS increases of 32% over the same period. In Q2, the company posted $9.88 earnings per share, a 26% year-over-year rise. Wall Street forecasts a 20% gain in Q3, leading to a 23% earnings increase for the full year.
URI Stock Equips A Buy Zone With IoT Technology
Boosted in part by its incorporation of IoT tech into its equipment rental business, United Rentals launched a breakout earlier this month. URI stock continues to trade within buy range after clearing a 471.82 buy point in an early stage cup with handle. The buy zone extends to 495.41.
The stock bullishly bounced off its 21-day exponential moving average on Aug. 3. Earlier in June, its 50-day line held above its longer-term 200-day benchmark, sparking a sharp rise that continues today.
In a clear sign of market leadership, the relative strength line has been gathering momentum in recent weeks, lifting it toward a 52-week high.
While the equipment rental firm did not make this month's list of new buys by the best mutual funds, still 164 funds with an A+ or A rating from IBD own shares in URI stock. The company also sports a 1.6 up/down volume ratio and a B- Accumulation/Distribution Rating, further highlighting demand for United Rentals.
Industry peer Herc is trying to fortify a cup-with-handle buy point of its own, while IOT stock looks for support for its heavy-volume breakout back in June.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
