Definitive Analysis
Definitive Analysis

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United Rentals, Inc. (URI)

Company Dividend Discount ModelIndustry: Rental & Leasing ServicesSector: Industrials

Valuation Snapshot

Stable Growth$910.09 - $2,414.21$1,391.62
Multi-Stage$618.45 - $675.95$646.68
Blended Fair Value$1,019.15
Current Price$954.66
Upside6.75%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS0.00%0.00%6.666.230.000.000.000.000.000.000.000.00
YoY Growth--6.90%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%
Dividend Yield--1.06%0.88%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)2,530.00
(-) Cash Dividends Paid (M)458.00
(=) Cash Retained (M)2,072.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)506.00316.25189.75
Cash Retained (M)2,072.002,072.002,072.00
(-) Cash Required (M)-506.00-316.25-189.75
(=) Excess Retained (M)1,566.001,755.751,882.25
(/) Shares Outstanding (M)65.2165.2165.21
(=) Excess Retained per Share24.0126.9228.86
LTM Dividend per Share7.027.027.02
(+) Excess Retained per Share24.0126.9228.86
(=) Adjusted Dividend31.0433.9535.89
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$910.09$1,391.62$2,414.21
Upside / Downside-4.67%45.77%152.89%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)2,530.002,694.452,869.593,056.113,254.763,466.323,570.31
Payout Ratio18.10%32.48%46.86%61.24%75.62%90.00%92.50%
Projected Dividends (M)458.00875.221,344.741,871.602,461.273,119.693,302.54

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)794.70802.23809.76
Year 2 PV (M)1,108.691,129.811,151.12
Year 3 PV (M)1,401.101,441.331,482.31
Year 4 PV (M)1,673.031,737.371,803.55
Year 5 PV (M)1,925.492,018.492,115.05
PV of Terminal Value (M)33,426.4635,040.9736,717.27
Equity Value (M)40,329.4742,170.1944,079.07
Shares Outstanding (M)65.2165.2165.21
Fair Value$618.45$646.68$675.95
Upside / Downside-35.22%-32.26%-29.19%

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