Localiza Rent a Car (OTCMKTS:LZRFY) and Fastenal (NASDAQ:FAST) Critical Survey
by Kim Johansen · The Markets DailyFastenal (NASDAQ:FAST – Get Free Report) and Localiza Rent a Car (OTCMKTS:LZRFY – Get Free Report) are both industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, earnings, analyst recommendations, institutional ownership and valuation.
Valuation and Earnings
This table compares Fastenal and Localiza Rent a Car”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Fastenal | $8.20 billion | 7.10 | $1.26 billion | $1.18 | 43.01 |
| Localiza Rent a Car | $7.48 billion | N/A | $335.90 million | $0.60 | 14.25 |
Fastenal has higher revenue and earnings than Localiza Rent a Car. Localiza Rent a Car is trading at a lower price-to-earnings ratio than Fastenal, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Fastenal and Localiza Rent a Car’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Fastenal | 15.45% | 34.03% | 26.16% |
| Localiza Rent a Car | 7.43% | 13.79% | 4.18% |
Dividends
Fastenal pays an annual dividend of $1.04 per share and has a dividend yield of 2.0%. Localiza Rent a Car pays an annual dividend of $0.35 per share and has a dividend yield of 4.1%. Fastenal pays out 88.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Localiza Rent a Car pays out 58.3% of its earnings in the form of a dividend. Fastenal has raised its dividend for 26 consecutive years. Localiza Rent a Car is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider and Institutional Ownership
81.4% of Fastenal shares are held by institutional investors. 0.3% of Fastenal shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Analyst Ratings
This is a summary of current ratings and price targets for Fastenal and Localiza Rent a Car, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Fastenal | 2 | 5 | 6 | 0 | 2.31 |
| Localiza Rent a Car | 1 | 0 | 0 | 0 | 1.00 |
Fastenal presently has a consensus target price of $49.50, suggesting a potential downside of 2.46%. Given Fastenal’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Fastenal is more favorable than Localiza Rent a Car.
Summary
Fastenal beats Localiza Rent a Car on 13 of the 15 factors compared between the two stocks.
About Fastenal
Fastenal Company, together with its subsidiaries, engages in the wholesale distribution of industrial and construction supplies in the United States, Canada, Mexico, North America, and internationally. It offers fasteners, and related industrial and construction supplies under the Fastenal name. The company’s fastener products include threaded fasteners, bolts, nuts, screws, studs, and related washers that are used in manufactured products and construction projects, as well as in the maintenance and repair of machines. It also offers miscellaneous supplies and hardware, including pins, machinery keys, concrete anchors, metal framing systems, wire ropes, strut products, rivets, and related accessories. The company serves the manufacturing market comprising original equipment manufacturers; maintenance, repair, and operations customers; non-residential construction market; farmers, truckers, railroads, mining companies, schools, and retail trades; and oil exploration, production, and refinement companies, as well as federal, state, and local governmental entities. Fastenal Company was founded in 1967 and is headquartered in Winona, Minnesota.
About Localiza Rent a Car
Localiza Rent a Car S.A. engages in car and fleet rental business. The company is also involved in granting franchises; sale of decommissioned and used cars; provision of sundry automotive, and travel and tourism services; and managing claims for insurance companies, as well as provision of tracking and telemetry services. It operates car rental agencies in Brazil, Argentina, Colombia, Ecuador, and Paraguay. The company serves individuals and legal entities. Localiza Rent a Car S.A. was founded in 1973 and is headquartered in Belo Horizonte, Brazil.