United Rentals(US:URI) The Motley Fool·2024-12-16 11:33Core Viewpoint - Investors can achieve market-beating returns by focusing on less flashy companies like United Rentals, which has outperformed the S&P 500 in 2024 and is expected to continue its growth into 2025 [1][2]. Company Performance - United Rentals has delivered a 40% total return in 2024, significantly outperforming the S&P 500, and is well-positioned for further growth in 2025 [2]. - The company operates over 1,600 global branch locations, primarily in North America, serving a diverse customer base across construction, industrial, energy, and mining sectors [3]. - Equipment rental sales, which account for 85% of total revenue, increased by 7.4% in the first nine months of 2024, while diluted earnings per share rose nearly 12% [4]. Growth Drivers - The Bipartisan Infrastructure Law, providing $550 billion for infrastructure investments through 2026, is a significant tailwind for United Rentals [5]. - Continued GDP growth, projected at 2.8% in 2025 by the OECD, will encourage private investments, benefiting United Rentals [9]. - The company is also exposed to growth in sectors such as semiconductor manufacturing, data centers, electric vehicles, and renewable energy investments [10]. Financial Health - United Rentals generated nearly $10 billion in free cash flow over the last five years, focusing on organic growth and strategic investments [11]. - The company's price-to-earnings (P/E) ratio is slightly over 20, below its last cyclical peak of 27.4, indicating reasonable valuation and potential for further stock appreciation [12].