Over the past few weeks I have been watching the developments of the car equipment and rental industry and one company I think is very interesting to analyze is Hertz Global Holdings Inc. (NYSE:HTZ). While there are many different factors to look at and consider when investing, in the article below I will look at the debt side of the company. I will analyze its total debt, total liabilities, debt ratios and what analyst and other top investors believe about this company. From this analysis we should get an idea of the company’s leverage and how much to expect in return for a long term investment.
This company has been through its fair shares of ups and downs in the past, and despite growth never being a problem, shareholders are currently arguing over management’s future strategy. While the Dollar Thrifty acquisition helped earn the firm more pricing power, and location openings, as well as airline traffic growth added on to 2013’s top line growth, some concerns remain. On the one hand, Hertz is still trailing behind the privately held rival Avis, making shareholders uneasy. Also, the company’s equipment rental business is very capital intensive, requiring a lot of inventory, in addition to the large investments necessary in order to maintain the total 670,000 car fleet. So, while profits grow, debt levels do too, as the company must constantly reinvest its earnings. Continue Reading »