BlueLinx (NYSE:BXC – Get Free Report) and McGrath RentCorp (NASDAQ:MGRC – Get Free Report) are both industrials companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, profitability, analyst recommendations, valuation and risk.
Institutional and Insider Ownership
90.8% of BlueLinx shares are owned by institutional investors. Comparatively, 92.0% of McGrath RentCorp shares are owned by institutional investors. 3.6% of BlueLinx shares are owned by company insiders. Comparatively, 1.4% of McGrath RentCorp 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.
Valuation and Earnings
This table compares BlueLinx and McGrath RentCorp”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| BlueLinx | $3.01 billion | 0.20 | $220,000.00 | ($0.25) | -299.44 |
| McGrath RentCorp | $944.23 million | 2.89 | $156.31 million | $6.21 | 17.97 |
McGrath RentCorp has lower revenue, but higher earnings than BlueLinx. BlueLinx is trading at a lower price-to-earnings ratio than McGrath RentCorp, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares BlueLinx and McGrath RentCorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| BlueLinx | -0.06% | 0.13% | 0.05% |
| McGrath RentCorp | 16.38% | 12.44% | 6.38% |
Volatility & Risk
BlueLinx has a beta of 1.45, meaning that its share price is 45% more volatile than the S&P 500. Comparatively, McGrath RentCorp has a beta of 0.45, meaning that its share price is 55% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of current ratings and recommmendations for BlueLinx and McGrath RentCorp, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| BlueLinx | 1 | 1 | 1 | 0 | 2.00 |
| McGrath RentCorp | 0 | 2 | 1 | 0 | 2.33 |
BlueLinx presently has a consensus price target of $83.50, indicating a potential upside of 11.54%. McGrath RentCorp has a consensus price target of $140.00, indicating a potential upside of 25.47%. Given McGrath RentCorp’s stronger consensus rating and higher probable upside, analysts clearly believe McGrath RentCorp is more favorable than BlueLinx.
Summary
McGrath RentCorp beats BlueLinx on 10 of the 13 factors compared between the two stocks.
About BlueLinx
BlueLinx Holdings Inc., together with its subsidiaries, engages in the distribution of residential and commercial building products in the United States. It distributes specialty products, including engineered wood, siding, millwork, outdoor living, specialty lumber and panels, and industrial products; and structural products, such as lumber, plywood, oriented strand boards, rebars and remesh, as well as other wood products that are used for structural support in construction projects. It also provides various value-added services and solutions to customers and suppliers. The company serves national home centers, pro dealers, cooperatives, specialty distributors, regional and local dealers, and industrial manufacturers. BlueLinx Holdings Inc. was incorporated in 2004 and is headquartered in Marietta, Georgia.
About McGrath RentCorp
McGrath RentCorp operates as a business to business rental company in the United States and internationally. It rents and sells relocatable modular buildings, portable storage containers, and electronic test equipment. The company operates through four segments: Mobile Modular, Portable Storage, TRS-RenTelco, and Enviroplex. The Mobile Modular segment rents and sells modular buildings designed for use as classrooms, temporary offices adjacent to existing facilities, sales offices, construction field offices, restroom buildings, health care clinics, child care facilities, office spaces, and various other purposes. The TRS-RenTelco segment rents and sells general purpose electronic test equipment, such as oscilloscopes, amplifiers, analyzers, signal source, and power source test equipment primarily to aerospace, defense, electronics, industrial, research, and semiconductor industries. It also provides communications test equipment, including network and transmission test equipment for various fiber, copper, and wireless networks to the manufacturers of communications equipment and products, electrical and communications installation contractors, field technicians, and service providers. The Portable Storage segment offers steel containers to provide a temporary storage solution. The Enviroplex segment manufactures and sells portable classrooms directly to public school districts and other educational institutions in California. The company was incorporated in 1979 and is based in Livermore, California.
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