Head to Head Comparison: Herc (NYSE:HRI) and Willis Lease Finance (NASDAQ:WLFC)

Willis Lease Finance (NASDAQ:WLFC) and Herc (NYSE:HRI) are both transportation companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Analyst Ratings

This is a breakdown of current ratings and price targets for Willis Lease Finance and Herc, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Willis Lease Finance	0	0	0	0	0.00
Herc	0	3	3	0	2.50

Herc has a consensus target price of $144.60, suggesting a potential upside of 21.79%. Given Herc’s stronger consensus rating and higher possible upside, analysts clearly believe Herc is more favorable than Willis Lease Finance.

Profitability

This table compares Willis Lease Finance and Herc’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Willis Lease Finance	18.77%	21.75%	3.61%
Herc	0.61%	20.77%	3.38%

Dividends

Willis Lease Finance pays an annual dividend of $1.00 per share and has a dividend yield of 0.7%. Herc pays an annual dividend of $2.80 per share and has a dividend yield of 2.4%. Willis Lease Finance pays out 5.9% of its earnings in the form of a dividend. Herc pays out 325.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Herc has increased its dividend for 2 consecutive years. Herc is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Willis Lease Finance and Herc”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Willis Lease Finance	$569.22 million	1.69	$108.61 million	$16.82	8.40
Herc	$3.54 billion	1.12	$211.00 million	$0.86	138.05

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

Institutional & Insider Ownership

93.7% of Willis Lease Finance shares are owned by institutional investors. Comparatively, 93.1% of Herc shares are owned by institutional investors. 53.9% of Willis Lease Finance shares are owned by company insiders. Comparatively, 1.3% of Herc shares are owned by company 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.

Volatility and Risk

Willis Lease Finance has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500. Comparatively, Herc has a beta of 1.83, suggesting that its share price is 83% more volatile than the S&P 500.

Summary

Herc beats Willis Lease Finance on 9 of the 17 factors compared between the two stocks.

About Willis Lease Finance

Willis Lease Finance Corporation operates as a lessor and servicer of commercial aircraft and aircraft engines worldwide. The company operates through two segments, Leasing and Related Operations, and Spare Parts Sales. The Leasing and Related Operations segment engages in acquiring and leasing commercial aircraft, aircraft engines, and other aircraft equipment, as well as the purchase and resale of commercial aircraft engines and other aircraft equipment, and other related businesses. The Spare Parts Sales segment purchases and resells after-market engine parts, whole engines, engine modules, and portable aircraft components. The company also focuses on engine management and consulting business. It serves commercial aircraft operators, as well as maintenance, repair, and overhaul organizations. As of December 31, 2023, it had a total lease portfolio of 337 engines, 12 aircraft, one marine vessel, and other leased parts and equipment, and with 74 lessees in 42 countries; and managed a total lease portfolio of 198 engines, aircraft, and related equipment for other parties. The company was founded in 1985 and is headquartered in Coconut Creek, Florida.

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.