United Rentals (NYSE:URI) shares surged nearly 4% in the early session today after the equipment rental company delivered an impressive fourth-quarter performance and hiked its quarterly dividend by 10.1%.
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Revenue jumped by 13% year-over-year to $3.73 billion. The figure exceeded estimates by $100 million. Additionally, EPS of $11.26 outpaced expectations by $0.57. During the quarter, rental revenue increased by 13.5%, and fleet productivity improved by 0.3%. Further, the company’s used equipment sales increased by 7.1%.
Importantly, United Rental’s free cash flow jumped by 30.7% to $2.31 billion. This jump was primarily attributable to lower payments for net rental capital expenditures. The company repurchased shares worth $1 billion in 2023. It plans to repurchase shares worth $250 million in Q1 and subsequently commence a new $1.5 billion share repurchase program. Moreover, United Rentals has increased its quarterly dividend by 10.1% to $1.63 per share. The URI dividend is payable on February 28 to investors of record on February 14.
Looking ahead to Fiscal Year 2024, URI expects total revenue to hover between $14.65 billion and $15.15 billion. In addition, adjusted EBITDA for the year is anticipated to land between $6.9 billion and $7.15 billion.
Is URI a Good Buy?
Not surprisingly, shares of the company have jumped by over 46% over the past year. Overall, the Street has a Hold consensus rating on United Rentals, and the average URI price target of $514.67 points to a potential downside of 10.8% in the stock.
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