Hertz Global vs CarMax Which Is More Promising?

Hertz Global Holdings and CarMax Inc. are two prominent companies in the automotive industry with their stocks being closely watched by investors. Hertz, a car rental company, has faced challenges in recent years, including bankruptcy filings, which have significantly impacted its stock performance. On the other hand, CarMax, a retailer of used vehicles, has consistently delivered strong financial results, leading to steady stock growth. Both companies operate in the competitive automotive sector, making their stock performance subject to various market forces and industry trends.

Hertz Global or CarMax?

When comparing Hertz Global and CarMax, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Hertz Global and CarMax.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Hertz Global has a dividend yield of -%, while CarMax has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Hertz Global reports a 5-year dividend growth of 0.00% year and a payout ratio of -0.07%. On the other hand, CarMax reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Hertz Global P/E ratio at -0.48 and CarMax's P/E ratio at 32.40. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Hertz Global P/B ratio is 1.93 while CarMax's P/B ratio is 2.19.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Hertz Global has seen a 5-year revenue growth of -0.70%, while CarMax's is 0.99%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Hertz Global's ROE at -127.87% and CarMax's ROE at 6.83%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $4.19 for Hertz Global and $86.61 for CarMax. Over the past year, Hertz Global's prices ranged from $2.47 to $10.82, with a yearly change of 338.06%. CarMax's prices fluctuated between $65.83 and $88.22, with a yearly change of 34.01%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.