Rent-A-Center (NASDAQ: RCII) is one of 21 public companies in the “Other Specialty Retailers” industry, but how does it compare to its peers? We will compare Rent-A-Center to related businesses based off the strength of its institutional ownership, earnings, profitability, risk, valuation, analyst recommendations and dividends.

Profitability

This table compares Rent-A-Center and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rent-A-Center -5.57% 3.87% 0.78%
Rent-A-Center Competitors 21.96% -15.12% 6.27%

Dividends

Rent-A-Center pays an annual dividend of $0.32 per share and has a dividend yield of 2.6%. 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 peers, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Rent-A-Center and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Rent-A-Center $2.80 billion $104.70 million -4.22
Rent-A-Center Competitors $3.37 billion $365.11 million 5.98

Rent-A-Center’s peers have higher revenue and earnings than Rent-A-Center. Rent-A-Center is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently the more affordable than other companies in its industry.

Risk and Volatility

Rent-A-Center has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500. Comparatively, Rent-A-Center’s peers have a beta of 1.23, suggesting that their average share price is 23% more volatile than the S&P 500.

Institutional & Insider Ownership

62.2% of shares of all “Other Specialty Retailers” companies are owned by institutional investors. 3.4% of Rent-A-Center shares are owned by company insiders. Comparatively, 22.7% of shares of all “Other Specialty Retailers” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations for Rent-A-Center and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rent-A-Center 2 3 2 1 2.25
Rent-A-Center Competitors 382 1016 1082 48 2.31

Rent-A-Center presently has a consensus price target of $11.50, suggesting a potential downside of 7.26%. All “Other Specialty Retailers” companies have a potential upside of 3.64%. Given Rent-A-Center’s peers stronger consensus rating and higher probable upside, analysts clearly believe Rent-A-Center has less favorable growth aspects than its peers.

Summary

Rent-A-Center peers beat Rent-A-Center on 10 of the 15 factors compared.

About Rent-A-Center

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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