Comparing Triton International (TRTN) and Aaron’s (AAN)

Triton International (NYSE: TRTN) and Aaron’s (NYSE:AAN) are both mid-cap transportation companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, dividends, valuation and earnings.

Dividends

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Triton International pays an annual dividend of $1.80 per share and has a dividend yield of 5.8%. Aaron’s pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. Triton International pays out 64.7% of its earnings in the form of a dividend. Aaron’s pays out 4.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Aaron’s has raised its dividend for 11 consecutive years.

Analyst Recommendations

This is a summary of recent ratings for Triton International and Aaron’s, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Triton International 0 1 4 0 2.80
Aaron’s 1 3 7 1 2.67

Triton International presently has a consensus target price of $43.60, suggesting a potential upside of 39.61%. Aaron’s has a consensus target price of $46.50, suggesting a potential downside of 3.61%. Given Triton International’s stronger consensus rating and higher possible upside, analysts plainly believe Triton International is more favorable than Aaron’s.

Volatility and Risk

Triton International has a beta of 2.62, meaning that its share price is 162% more volatile than the S&P 500. Comparatively, Aaron’s has a beta of 0.05, meaning that its share price is 95% less volatile than the S&P 500.

Insider & Institutional Ownership

65.8% of Triton International shares are owned by institutional investors. 1.4% of Triton International shares are owned by company insiders. Comparatively, 2.3% of Aaron’s shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Triton International and Aaron’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Triton International 29.83% 10.76% 2.28%
Aaron’s 8.65% 11.64% 7.06%

Valuation and Earnings

This table compares Triton International and Aaron’s’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Triton International $1.16 billion 2.17 $344.59 million $2.78 11.23
Aaron’s $3.38 billion 1.00 $292.53 million $2.56 18.84

Triton International has higher earnings, but lower revenue than Aaron’s. Triton International is trading at a lower price-to-earnings ratio than Aaron’s, indicating that it is currently the more affordable of the two stocks.

Triton International Company Profile

Triton International Limited engages in the acquisition, leasing, re-leasing, and sale of various types of intermodal transportation equipment to shipping lines, and freight forwarding companies and manufacturers. It operates in two segments, Equipment Leasing and Equipment Trading. The company primarily leases dry freight, refrigerated, special, and tank containers; and chassis used for the transportation of containers, as well as manages containers owned by third parties. As of December 31, 2017, its total fleet consisted of 3,429,796 containers and chassis representing 5,648,987 twenty-foot equivalent units. The company also purchases containers from shipping line customers and other sellers, and resells these containers to container retailers and users. It operates in Asia, Europe, the Americas, Bermuda, and internationally. The company was founded in 1980 and is headquartered in Hamilton, Bermuda.

Aaron’s Company Profile

Aaron's, Inc. operates as an omnichannel provider of lease-purchase solutions. It operates through three segments: Progressive Leasing, Aaron's Business, and DAMI. The company engages in the sale, lease ownership, and specialty retailing of furniture, consumer electronics, home appliances, and accessories. As of February 15, 2018, it operated approximately 1,726 company-operated and franchised stores in 47 states and Canada, as well as its e-commerce platform, Aarons.com. Aaron's, Inc. was founded in 1955 and is headquartered in Atlanta, Georgia.

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