NasdaqGS:RCII

Stock Analysis Report

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Executive Summary

Rent-A-Center, Inc., together with its subsidiaries, leases household durable goods to customers on a lease-to-own basis. More Details


Snowflake Analysis

Solid track record, good value and pays a dividend.


Similar Companies

Share Price & News

How has Rent-A-Center's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RCII is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: RCII's weekly volatility (6%) has been stable over the past year.


Market Performance


7 Day Return

0.3%

RCII

0.08%

US Specialty Retail

1.5%

US Market


1 Year Return

33.3%

RCII

23.0%

US Specialty Retail

22.3%

US Market

Return vs Industry: RCII exceeded the US Specialty Retail industry which returned 23.9% over the past year.

Return vs Market: RCII exceeded the US Market which returned 22.1% over the past year.


Shareholder returns

RCIIIndustryMarket
7 Day0.3%0.08%1.5%
30 Day14.2%6.7%8.8%
90 Day21.0%10.0%10.8%
1 Year39.0%33.3%24.2%23.0%25.1%22.3%
3 Year218.7%202.5%74.6%67.2%49.5%39.6%
5 Year157.6%131.0%84.4%70.5%105.8%83.3%

Long-Term Price Volatility Vs. Market

How volatile is Rent-A-Center's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Rent-A-Center undervalued compared to its fair value and its price relative to the market?

38.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RCII ($35.64) is trading below our estimate of fair value ($58.24)

Significantly Below Fair Value: RCII is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: RCII is good value based on its PE Ratio (10.1x) compared to the US Specialty Retail industry average (19.2x).

PE vs Market: RCII is good value based on its PE Ratio (10.1x) compared to the US market (19.4x).


Price to Earnings Growth Ratio

PEG Ratio: RCII is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: RCII is overvalued based on its PB Ratio (3.6x) compared to the US Specialty Retail industry average (2.3x).


Next Steps

Future Growth

How is Rent-A-Center forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

7.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RCII's forecast earnings growth (7.8% per year) is above the savings rate (2.2%).

Earnings vs Market: RCII's earnings (7.8% per year) are forecast to grow slower than the US market (21.9% per year).

High Growth Earnings: RCII's earnings are forecast to grow, but not significantly.

Revenue vs Market: RCII's revenue (6.5% per year) is forecast to grow slower than the US market (10.2% per year).

High Growth Revenue: RCII's revenue (6.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if RCII's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Rent-A-Center performed over the past 5 years?

74.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RCII has high quality earnings.

Growing Profit Margin: RCII's current net profit margins (7%) are higher than last year (5.1%).


Past Earnings Growth Analysis

Earnings Trend: RCII has become profitable over the past 5 years, growing earnings by 74% per year.

Accelerating Growth: RCII's earnings growth over the past year (42.3%) is below its 5-year average (74% per year).

Earnings vs Industry: RCII earnings growth over the past year (42.3%) exceeded the Specialty Retail industry 14.3%.


Return on Equity

High ROE: RCII's Return on Equity (35.5%) is considered high.


Next Steps

Financial Health

How is Rent-A-Center's financial position?


Financial Position Analysis

Short Term Liabilities: RCII's short term assets ($347.3M) do not cover its short term liabilities ($511.8M).

Long Term Liabilities: RCII's short term assets ($347.3M) do not cover its long term liabilities ($613.4M).


Debt to Equity History and Analysis

Debt Level: RCII's debt to equity ratio (35.1%) is considered satisfactory.

Reducing Debt: RCII's debt to equity ratio has reduced from 66.3% to 35.1% over the past 5 years.

Debt Coverage: RCII's debt is well covered by operating cash flow (148.7%).

Interest Coverage: RCII's interest payments on its debt are well covered by EBIT (16.8x coverage).


Balance Sheet


Next Steps

Dividend

What is Rent-A-Center current dividend yield, its reliability and sustainability?

3.25%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: RCII's dividend (3.25%) is higher than the bottom 25% of dividend payers in the US market (1.49%).

High Dividend: RCII's dividend (3.25%) is low compared to the top 25% of dividend payers in the US market (4.1%).


Stability and Growth of Payments

Stable Dividend: RCII's dividend payments have been volatile in the past 10 years.

Growing Dividend: RCII's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (31.6%), RCII's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: RCII's dividends in 3 years are forecast to be well covered by earnings (32.3% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.1yrs

Average management tenure


CEO

Mitch Fadel (63 yo)

2.92yrs

Tenure

US$8,665,405

Compensation

Mr. Mitchell E. Fadel, also known as Mitch, has been Chief Executive Officer of Rent-A-Center, Inc since January 2, 2018. Mr. Fadel served as President of U.S. Pawn at EZCORP, Inc. from August 2015 to Dece...


CEO Compensation Analysis

Compensation vs Market: Mitch's total compensation ($USD8.67M) is above average for companies of similar size in the US market ($USD4.20M).

Compensation vs Earnings: Mitch's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Mitchell Fadel
CEO & Director2.92yrsUS$8.67mno data
Maureen Short
Executive VP & CFO4yrsUS$1.84m0.12%
$ 2.2m
Ann Davids
Executive VP2.83yrsUS$1.15m0.0018%
$ 34.2k
Catherine Skula
Executive Vice President of Franchising8.92yrsUS$1.13m0.11%
$ 2.0m
Christi Liebe
CTO & VP of ITno datano datano data
Michael Santimaw
Senior VP & Chief Information Officer1.83yrsno datano data
Bryan Pechersky
Executive VP0.50yrno datano data
Sonia Holland
Senior Director of Communicationsno datano datano data
Stephen McKinley
Vice President of Sales – Acceptance Now4.92yrsno datano data
Martin Evans
Chief Human Resources Officer & Executive VP3.42yrsno datano data
Andrew Trusevich
Senior VP & Asst. General Counselno datano datano data
Christopher Crocker
Executive Vice President of Acceptance Now3.08yrsno datano data

3.1yrs

Average Tenure

48.5yo

Average Age

Experienced Management: RCII's management team is considered experienced (3.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Mitchell Fadel
CEO & Director2.92yrsUS$8.67mno data
Jeffrey Brown
Independent Chairmanno dataUS$365.79k0.038%
$ 735.0k
Carol McFate
Independent Director1.5yrsUS$58.75kno data
Michael Gade
Independent Director15.58yrsUS$236.54k0.0074%
$ 142.5k
Harold Lewis
Independent Director1.5yrsUS$59.00kno data
Glenn Marino
Independent Director0.83yrno datano data
Christopher Hetrick
Independent Director3.5yrsUS$244.27k0.025%
$ 489.2k

2.5yrs

Average Tenure

63yo

Average Age

Experienced Board: RCII's board of directors are not considered experienced ( 2.5 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: RCII insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Rent-A-Center, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Rent-A-Center, Inc.
  • Ticker: RCII
  • Exchange: NasdaqGS
  • Founded: 1986
  • Industry: Computer and Electronics Retail
  • Sector: Retail
  • Market Cap: US$1.931b
  • Shares outstanding: 54.17m
  • Website: https://www.rentacenter.com

Number of Employees


Location

  • Rent-A-Center, Inc.
  • 5501 Headquarters Drive
  • Plano
  • Texas
  • 75024
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RCIINasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJan 1995
RACDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1995
RCII *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1995

Biography

Rent-A-Center, Inc., together with its subsidiaries, leases household durable goods to customers on a lease-to-own basis. The company operates through four segments: Rent-A-Center Business, Preferred Lease...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/12/05 00:26
End of Day Share Price2020/12/04 00:00
Earnings2020/09/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.