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United Rentals Investor Relations Material

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Q4 2023

United Rentals
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Q4 2023

25 Jan, 2024
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Q3 2023

26 Oct, 2023
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The world’s #1 equipment rental business

Depending on your definition, United Rentals is perhaps not a pure industrial company but no doubt a key supplier to the sector. As the largest equipment rental company in the world, United Rentals operates an integrated network of almost 1,400 rental locations spread over North America, Europe, Australia, and New Zealand.

Offers more than rentals

The company offers general, aerial, and specialty products in 4,400 classes for industrial and construction companies, utility municipalities, and homeowners.

Apart from its rental business, the company sells new and used equipment and offers servicing and safety training. 

United Rentals' IPO

United Rentals had its IPO in 1997. By averaging almost seven monthly acquisitions between 1998 and 2001, the company quickly became North America's largest equipment rental company and has increased its market share ever since.

Strategy for success

Today the company is maximizing their long-term value creation by; capitalizing on the ongoing shift towards rental over ownership and leveraging cross-selling to capture more wallet share. In addition, they have ongoing projects for optimizing costs and margins by leveraging a LEAN mindset, focusing on fixed cost leverage, improving their product and customer mix, and leveraging their technology and systems. 

Is the customer profiting from renting?

United’s customers can be found basically everywhere in our society, to name a few:

  • Manufacturing

  • Construction

  • Metals and mining

  • Food and beverage

  • Entertainment

  • Pulp and paper

  • Infrastructure.

So, how do customers profit from renting instead of buying their equipment? Despite differing needs, there is a lot to gain from renting. It is the same as for your home, meaning fewer responsibilities, predictable expenses, and more flexibility when renting. But it does expose you to eventually higher rent costs. On the other hand, buying demands significant upfront payments with ongoing costs but may provide a sense of ownership and stability.  

For United Rentals customers, renting means conserving capital, having flexibility, and the right equipment for any job despite no need for massive storage, low downtime, and a 24/7 support service.

What about the future?

Looking forward, Specialty Solutions are a fast-growing part of United Rentals. The segment has grown with a CAGR of almost 28 percent since 2012—representing about one-third of the total revenue in 2021. 

The fact that the equipment rental market still needs to be more fragmented means there is much room to grow for United Rentals, despite already being the market leader. United and its largest competitor Ashtead Group have an approximately 26 percent market share in North America as per United’s Q3 report, with United at 15 percent. Looking in the rearview mirror, United has increased its revenue 3.5 times since 2009. Their EBIT margin has increased from roughly 6 percent to 25 percent over the same period. United Rentals is also doing a lot of share buybacks and has repurchased 25.4 million shares since 2014—decreasing the number of outstanding shares by 26 percent. 

Other publicly listed companies within the business are McGrath RentCorp, C.R Horton, and Herc Rentals, to name a few.