By: Rob Wertheimer
Over the past 10 years, URI has an EPS CAGR of 17%, while Ashtead/Sunbelt posted 25%. Except for valuation, the model is somewhat similar to a rising retail chain, or an industrial distributor from ten years ago. The growth path is visible and repeatable: open more outlets and do more business, or sell more stuff at current locations. Add to that competitive advantage, where a Five Guys has scale and systems advantage over a corner diner, where Fastenal has scale and systems advantages over mom and pop distributors, and where leading rental companies have scale and systems over smaller outlets, that create a hard to replicate competitive moat.