Critical Review: Rent-A-Center (RCII) vs. Its Competitors
Rent-A-Center (NASDAQ: RCII) is one of 21 publicly-traded companies in the “Other Specialty Retailers” industry, but how does it compare to its rivals? We will compare Rent-A-Center to similar companies based on the strength of its analyst recommendations, institutional ownership, dividends, valuation, earnings, profitability and risk.
Risk and Volatility
Rent-A-Center has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500. Comparatively, Rent-A-Center’s rivals have a beta of 1.24, suggesting that their average share price is 24% more volatile than the S&P 500.
Earnings & Valuation
This table compares Rent-A-Center and its rivals revenue, earnings per share and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|Rent-A-Center||$2.80 billion||$104.70 million||-3.89|
|Rent-A-Center Competitors||$3.37 billion||$363.72 million||4.69|
Rent-A-Center’s rivals have higher revenue and earnings than Rent-A-Center. Rent-A-Center is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.
Rent-A-Center pays an annual dividend of $0.32 per share and has a dividend yield of 2.8%. Rent-A-Center pays out -10.9% of its earnings in the form of a dividend. As a group, “Other Specialty Retailers” companies pay a dividend yield of 1.1% and pay out 68.7% of their earnings in the form of a dividend. Rent-A-Center is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.
This table compares Rent-A-Center and its rivals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
61.9% of shares of all “Other Specialty Retailers” companies are held by institutional investors. 3.4% of Rent-A-Center shares are held by company insiders. Comparatively, 22.7% of shares of all “Other Specialty Retailers” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This is a summary of recent recommendations for Rent-A-Center and its rivals, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Rent-A-Center presently has a consensus target price of $11.50, indicating a potential upside of 0.44%. As a group, “Other Specialty Retailers” companies have a potential downside of 12.26%. Given Rent-A-Center’s higher probable upside, equities research analysts plainly believe Rent-A-Center is more favorable than its rivals.
Rent-A-Center rivals beat Rent-A-Center on 9 of the 14 factors compared.
Rent-A-Center, Inc. is a rent-to-own operator in North America. The Company provides an opportunity to obtain ownership of products, such as consumer electronics, appliances, computers (including tablets), smartphones and furniture (including accessories), under rental purchase agreements. The Company operates in four segments: Core U.S., Acceptance Now, Mexico, and Franchising. As of December 31, 2016, the Company operated over 2,463 Company-owned stores in the United States, Canada and Puerto Rico. The Company’s Mexico segment consists of the Company-owned rent-to-own stores in Mexico. As of December 31, 2016, the Company operated 130 stores in this segment. Its Franchising segment engages in the sale of rental merchandise to its franchisees. As of December 31, 2016, the Company’s Franchising segment franchised 229 stores in 31 states operating under the Rent-A-Center (152 stores), ColorTyme (39 stores) and RimTyme (38 stores) names.
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