Over the past three months, the Trading Companies & Distributors industry has been one of the top growth leaders in the S&P 500 index, up 26.8%.
The largest companies in this industry (by market capitalization): W.W. Grainger ($58.5B), which distributes industrial goods, and United Rentals ($57.4B), the world’s largest industrial equipment rental company.
Based on the latest quarterly reporting data, we analyzed each company’s profitability, strength, and efficiency criteria according to the methodology of Stanford University professor Joseph Piotroski.
As you can see, in terms of fundamental data, both companies are currently showing rather weak results. However, W.W. Grainger is superior to United Rentals in terms of sustainability.
Over the past 3 months, W.W. Grainger’s shares have risen by +25.3% and United Rentals by +27.1% (the S&P 500 index is up +12.1%). United Rentals not only outperformed its closest competitor, but also showed better results compared to the index.
So, the winner in this issue is United Rentals. Although W.W. Grainger is superior in terms of funding, United Rentals’ business outperforms its competitor in terms of leverage and liquidity, and its shares show better returns.
* This is not an investment recommendation. It is up to each individual to decide which criteria to favor when making an investment decision, taking into account their goals and individual risk tolerance.
