Rent-A-Center, Inc. (NASDAQ:$RCII) is a rent-to-own operator in North America who provides a range of products available under rental purchase agreements. Their products include computers, smartphones, furniture, appliance and consumer electronics. But how does the company stack up to competition?
Dividends
Rent-A-Center recently held a dividend yield of 2.8% with an annualized dividend of $0.32 per share and -10.9% payout of its earnings in dividend. In comparison, ‘other specialty retailers’ payout 68.7% of their earnings in dividend with a dividend yield of 1.1%. This makes Rent-A-Center the better dividend stock.
What are the Risks?
Rent-A-Center’s beta is 32% below the S&P 500 average at 0.68. Their rivals, on the other hand, average at a beta of 1.23, making it 23% more volatile than the standard.
Valuations
Rent-A-Center has a Gross Revenue of $2.80 billion with an EBITDA of $104.70 million. This results in a -3.88 Price/Earnings Ratio. This is compared to the rivals who hold a Gross Revenue of $3.37 billion and EBITDA $363.72 million, resulting in a Price/Earnings Ratio of 4.75.
Comparatively, Rent-A-Center has lower revenue and earnings than their rivals on average, but is currently trading at a lower price-to-earnings ratio, meaning it is potentially the more affordable company in the industry.
Profitability
With a Return on Equity of 3.87% and a Return on Assets of 0.78%, the company has Net Margins of -5.57%. The competitors, on the other hand, have an average of -15.12% Return on Equity and a 6.27% Return on Assets, but a Net Margin 21.96%.
What are Analysts Saying?
Currently, Rent-A-Center has 3 ‘Hold’ ratings, 2 ‘Sell’ ratings, 2 ‘Buy’ ratings, and 1 ‘Strong Buy’ rating, giving it an average rating score of 2.25. The competitors, on the other hand, have 1088 ‘Buy’ ratings, 1036 ‘Hold’ ratings, 387 ‘Sell’ ratings, and 48 ‘Strong Buy’ ratings, giving it an aggregate average of 2.31.
Meanwhile, Rent-A-Center has a consensus target price of $11.50 indicating a potential upside of 0.70%. On the other hand, the competitors have an average potential downside of 12.56%. This gives Rent-A-Center an edge over its competition with a bigger upside.
Insiders and Institutions
Insider and Institutional ownership can indicate that said groups have faith that the stock will grow. Currently, 61.9% of shares in Rent-A-Center rivals are, on average, held by institutions.
Insiders currently hold 3.4% of Rent-A-Center, compared to its rivals 22.7% ownership of all shares by its rivals.
The Bottom Line
Rent-A-Center, Inc.’s rivals lose to them in 9 out of the 15 categories.
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