With companies recovering now from last year’s pandemic-driven operational shock amid rising consumer spending, the demand for rental and leasing services is increasing. Therefore, we think popular leasing companies Ryder System (NYSE:R), Rent-A-Center (NASDAQ:RCII), Herc Holdings (NYSE:HRI), and Triton International (NYSE:TRTN) should grow significantly in the near term. Read on.Rising consumer spending has been benefiting the rental and leasing service industry significantly. Despite the rapid spread of the COVID-19 Delta variant, U.S. consumer confidence hit a 17-month high in July at 129.1 as the demand for manufactured capital goods and business spending on equipment remained high. Barclays (LON:BARC) economist Pooja Sriram said in a Reuters interview, “The Delta variant does pose some downside risk, although we do not expect it to derail confidence entirely, given that its spread is uneven and largely concentrated in areas with low vaccination rates.”
However, given prevailing inflation rates and dynamic consumer preferences, companies are renting or leasing capital equipment increasingly. The global leasing market is expected to grow 14.4% year-over-year to $1.36 trillion in 2021, and at an 8% CAGR over the next four years to $1.85 trillion in 2025.
Given this backdrop, we believe popular rental and leasing service providers Ryder System, Inc. (R), Rent-A-Center Inc . (RCII), Herc Holdings Inc. (HRI), and Triton International Limited (TRTN) should grow significantly in the near term.