NasdaqGS:RCII

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Good value with proven track record.


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


Market Performance


7 Day Return

-0.6%

RCII

1.5%

US Specialty Retail

0.4%

US Market


1 Year Return

84.9%

RCII

8.0%

US Specialty Retail

6.9%

US Market

Return vs Industry: RCII exceeded the US Specialty Retail industry which returned 8% over the past year.

Return vs Market: RCII exceeded the US Market which returned 6.9% over the past year.


Shareholder returns

RCIIIndustryMarket
7 Day-0.6%1.5%0.4%
30 Day1.6%3.5%-1.1%
90 Day1.2%4.5%-0.5%
1 Year86.7%84.9%9.8%8.0%9.3%6.9%
3 Year186.7%177.6%42.6%35.3%45.8%36.4%
5 Year-0.5%-10.0%57.5%43.6%62.9%45.1%

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?

42.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: RCII ($26.37) is trading below our estimate of fair value ($45.8)

Significantly Undervalued: 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 (12.2x) compared to the Specialty Retail industry average (15.4x).

PE vs Market: RCII is good value based on its PE Ratio (12.2x) compared to the US market (17.6x).


Price to Earnings Growth Ratio

Low PEG Ratio: RCII is poor value based on its PEG Ratio (2.3x)


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 (1.4x).


Next Steps

Future Growth

How is Rent-A-Center forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

5.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RCII's forecast earnings growth (5.4% per year) is above the savings rate (2.7%).

Earnings vs Market: RCII's earnings (5.4% per year) are forecast to grow slower than the US market (14.6% per year).

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

Revenue vs Market: RCII's revenue (3.3% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: RCII's revenue (3.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: RCII's Return on Equity is forecast to be high in 3 years time (26%)


Next Steps

Past Performance

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

13.7%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: RCII's earnings have grown by 13.7% per year over the past 5 years.

Accelerating Growth: RCII's earnings growth over the past year (621.2%) exceeds its 5-year average (13.7% per year).

Earnings vs Industry: RCII earnings growth over the past year (621.2%) exceeded the Specialty Retail industry 8.3%.


Return on Equity

High ROE: Whilst RCII's Return on Equity (29.69%) is high, this metric is skewed due to their high level of debt.


Return on Assets

ROA vs Industry: RCII has a higher Return on Assets than the Specialty Retail industry average last year.


Return on Capital Employed

ROCE Improving: RCII's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

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


Financial Position Analysis

Short Term Liabilities: RCII's short term assets ($458.9M) exceeds its short term liabilities ($410.1M)

Long Term Liabilities: RCII's short term assets (458.9M) do not cover its long term liabilities (942.3M)


Debt to Equity History and Analysis

Debt Level: RCII's debt to equity ratio (138%) is considered high

Reducing Debt: RCII's debt to equity ratio has increased from 68.8% to 138% over the past 5 years.

Debt Coverage: RCII's debt is well covered by operating cash flow (49.9%).

Interest Coverage: RCII's interest payments on its debt are well covered by EBIT (4.1x coverage).


Balance Sheet

Inventory Level: RCII has a high level of physical assets or inventory.

Debt Coverage by Assets: RCII's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

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

3.79%

Current Dividend Yield


Dividend Yield vs Market

company3.8%marketbottom25%1.4%markettop25%3.7%industryaverage2.0%forecastin3Years4.2%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: RCII's dividend (3.79%) is higher than the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: RCII's dividend (3.79%) is in the top 25% of dividend payers in the US market (3.73%)

Stable Dividend: RCII has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: RCII's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: Unable to calculate sustainability of dividends as RCII has not reported any payouts.


Future Payout to Shareholders

Future Dividend Coverage: RCII's dividends in 3 years are forecast to be well covered by earnings (49% payout ratio).


Next Steps

Management

What is the CEO of Rent-A-Center's salary, the management and board of directors tenure and is there insider trading?

2.0yrs

Average management tenure


CEO

Mitch Fadel (62yo)

1.8yrs

Tenure

US$4,862,010

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 has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the US market.

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


Management Age and Tenure

2.0yrs

Average Tenure

48yo

Average Age

Experienced Management: RCII's management team is considered experienced (2 years average tenure).


Board Age and Tenure

2.3yrs

Average Tenure

60.5yo

Average Age

Experienced Board: RCII's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$54,509,51720 Mar 19
Vintage Capital Management, LLC
EntityCompany
Shares2,679,992
Max PriceUS$21.47
BuyUS$12,737,87628 Dec 18
Engaged Capital, LLC
EntityCompany
Shares800,000
Max PriceUS$16.18
SellUS$135,75127 Dec 18
Catherine Skula
EntityIndividual
Role
Senior Key Executive
Executive Vice President of Franchising
Shares9,014
Max PriceUS$15.06

Ownership Breakdown


Management Team

  • Mitch Fadel (62yo)

    CEO & Director

    • Tenure: 1.8yrs
    • Compensation: US$4.86m
  • Cathy Skula (47yo)

    Executive Vice President of Franchising

    • Tenure: 7.8yrs
    • Compensation: US$1.06m
  • Ann Davids (49yo)

    Executive VP

    • Tenure: 1.7yrs
  • Dawn Wolverton

    VP, Interim General Counsel & Secretary

    • Tenure: 0.3yrs
  • Stephen McKinley

    Vice President of Sales – Acceptance Now

    • Tenure: 3.8yrs
  • Maureen Short (44yo)

    Executive VP & CFO

    • Tenure: 2.8yrs
    • Compensation: US$1.04m
  • Christi Liebe

    CTO & VP of IT

    • Tenure: 0yrs
  • Martin Evans

    Chief Human Resources Officer & Executive VP

    • Tenure: 2.3yrs
  • Sonia Holland

    Senior Director of Communications

    • Tenure: 0yrs
  • Mike Santimaw

    Senior VP & Chief Information Officer

    • Tenure: 0.7yrs

Board Members

  • Mitch Fadel (62yo)

    CEO & Director

    • Tenure: 1.8yrs
    • Compensation: US$4.86m
  • Jeff Brown (59yo)

    Independent Chairman

    • Tenure: 0yrs
    • Compensation: US$242.83k
  • Carol McFate (66yo)

    Independent Director

    • Tenure: 0.3yrs
  • Mike Gade (68yo)

    Independent Director

    • Tenure: 14.4yrs
    • Compensation: US$178.50k
  • Harold Lewis (58yo)

    Independent Director

    • Tenure: 0.3yrs
  • Christopher Hetrick (40yo)

    Independent Director

    • Tenure: 2.3yrs
    • Compensation: US$237.33k

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$1.431b
  • Shares outstanding: 54.27m
  • 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

Biography

Rent-A-Center, Inc., together with its subsidiaries, leases household durable goods to customers on a rent-to-own basis. The company operates through four segments: Core U.S., Acceptance Now, Mexico, and F ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/19 23:41
End of Day Share Price2019/10/18 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.