Contrasting Core & Main (NYSE:CNM) and Herc (NYSE:HRI)

Herc (NYSE:HRI) and Core & Main (NYSE:CNM) are both mid-cap industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.

Valuation & Earnings

This table compares Herc and Core & Main”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Herc	$4.38 billion	1.11	$1.00 million	$1.47	98.71
Core & Main	$7.65 billion	1.05	$441.00 million	$2.36	17.65

Core & Main has higher revenue and earnings than Herc. Core & Main is trading at a lower price-to-earnings ratio than Herc, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

93.1% of Herc shares are held by institutional investors. Comparatively, 94.2% of Core & Main shares are held by institutional investors. 2.2% of Herc shares are held by insiders. Comparatively, 1.5% of Core & Main shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Herc has a beta of 1.86, meaning that its share price is 86% more volatile than the S&P 500. Comparatively, Core & Main has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500.

Profitability

This table compares Herc and Core & Main’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Herc	1.01%	10.33%	1.44%
Core & Main	5.87%	26.17%	8.58%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Herc and Core & Main, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Herc	0	4	5	0	2.56
Core & Main	0	6	7	0	2.54

Herc currently has a consensus target price of $183.00, indicating a potential upside of 26.12%. Core & Main has a consensus target price of $54.30, indicating a potential upside of 30.37%. Given Core & Main’s higher possible upside, analysts plainly believe Core & Main is more favorable than Herc.

Summary

Core & Main beats Herc on 9 of the 14 factors compared between the two stocks.

About Herc

Herc Holdings Inc., together with its subsidiaries, operates as an equipment rental supplier. It rents aerial, earthmoving, material handling, trucks and trailers, air compressors, compaction, and lighting equipment, as well as generators, and safety supplies and expendables; and provides ProSolutions, an industry specific solution based services, such as pumping solutions, power generation, climate control, remediation and restoration, and studio and production equipment. The company also sells used equipment and contractor supplies, such as construction consumables, tools, small equipment, and safety supplies; provides repair, maintenance, equipment management, and safety training services, as well as offers ancillary services, such as equipment transport, rental protection, cleaning, refueling, and labor. It serves non-residential and residential construction, specialty trade, restoration, remediation and environment, and facility maintenance contractors; industrial manufacturing industries, including automotive and aerospace, power, metals and mining, agriculture, pulp, paper and wood, food and beverage, and refineries and petrochemical industries; infrastructure and government sectors; and commercial and retail service, hospitality, healthcare, recreation, entertainment production, and special event management customers through its sales team, industry catalogs, as well as through participation and sponsorship of industry events, trade shows, and Internet. As of December 31, 2017, it operated approximately 275 locations in the United States, Canada, China, the United Kingdom, Saudi Arabia, and Qatar. Herc Holdings Inc. is based in Bonita Springs, Florida.

About Core & Main

Core & Main, Inc. is a specialty distributor focused on water, wastewater, storm drainage and fire protection products, and related services. The company provides infrastructure solutions to municipalities, private water companies and professional contractors across municipal, non-residential, and residential end markets, nationwide. The company was founded in 1874 and is headquartered in St. Louis, MO.