United Rentals, the world’s largest equipment rental company, announced that its board of directors has approved an enhanced capital allocation strategy that remains focused on balancing growth and returns. Specifically, the company is lowering its targeted leverage range to 2.0x-3.0x, from 2.5x-3.5x. The company expects to end the year with a net leverage ratio of approximately 2.5x versus a reported net leverage ratio of 2.9x as of March 31, 2019.
"Over the last decade our capital allocation strategy has served our company and our investors well,” said Matthew Flannery, CEO of United Rentals. “This change is consistent with other actions we’ve taken to deploy our capital with a balanced approach to grow our business, enhance our cash flows and improve financial flexibility. The evolution of our business, and the resulting durable cash flow, provides us the further opportunity to both fully support our growth initiatives and reduce our financial leverage.”
"We remain focused on exercising strong capital stewardship to drive sustainable shareholder value,” added Jessica Graziano, United Rentals’ chief financial officer. “Today’s announcement reflects the culmination of an extensive six-month review of our capital allocation strategy. We expect this change in leverage to lower our beta and potentially unlock value for our shareholders without hindering our ability to continue to invest in growth.”
Also, the company reaffirms its 2019 financial guidance. The complete guidance is available under Investor Relations on unitedrentals.com. The company also remains committed to completing its current $1.25 billion share repurchase program.
United Rentals, based in Stamford, Conn., is No. 1 on the RER 100.