Why Ashtead Group’s rental-focused model is winning over long-term investors
Ashtead Group plc has become a standout name among investors in recent years. The company specialises in renting construction equipment and heavy machinery rather than selling it outright. Its strong growth and focus on the booming U.S. market have made it a popular choice for long-term investors.
Ashtead operates through its Sunbelt Rentals brand, which provides a wide range of machinery for construction, emergencies, and events. With over 590 locations across the U.S. and Canada, Sunbelt Rentals serves commercial construction as its main revenue driver. In the UK, the company’s A-Plant division runs 150 branches, catering to a mature rental market.
The company’s business model centres on equipment rental, setting it apart from competitors that rely on sales. Ashtead also differentiates itself with a balanced presence in North America and the UK. However, its heavy exposure to the U.S. economy and construction cycles can lead to stock volatility. Despite this, Ashtead has delivered strong stock performance in recent years. Its valuation metrics, such as a price-to-earnings ratio of around 14-16x, remain below sector averages. Yet, the company carries a high debt-to-equity ratio of 146.30, indicating significant leverage.
Ashtead continues to attract investors betting on long-term growth in construction and infrastructure. Its broad equipment offerings and strategic market presence position it well for evolving industry trends. The company’s performance, however, remains closely tied to economic conditions in its key regions.
