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Market Cap

US$3.9b

Last Updated

2021/05/12 22:27 UTC

Data Sources

Company Financials +

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

Undervalued average dividend payer.


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

-7.4%

RCII

-5.1%

US Specialty Retail

-2.8%

US Market


1 Year Return

149.1%

RCII

103.4%

US Specialty Retail

49.4%

US Market

Return vs Industry: RCII exceeded the US Specialty Retail industry which returned 101.5% over the past year.

Return vs Market: RCII exceeded the US Market which returned 48.6% over the past year.


Shareholder returns

RCIIIndustryMarket
7 Day-7.4%-5.1%-2.8%
30 Day-3.4%-2.7%-2.3%
90 Day5.7%6.5%-1.3%
1 Year161.0%149.1%104.8%103.4%51.8%49.4%
3 Year483.7%446.2%90.2%82.8%57.5%47.6%
5 Year410.2%360.7%125.5%109.4%121.7%97.1%

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?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RCII ($55.88) is trading below our estimate of fair value ($143.35)

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 (15.1x) compared to the US Specialty Retail industry average (17.6x).

PE vs Market: RCII is good value based on its PE Ratio (15.1x) compared to the US market (19.9x).


Price to Earnings Growth Ratio

PEG Ratio: RCII is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: RCII is overvalued based on its PB Ratio (5x) compared to the US Specialty Retail industry average (3.2x).


Future Growth

How is Rent-A-Center forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

19.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RCII's forecast earnings growth (19.8% per year) is above the savings rate (2%).

Earnings vs Market: RCII's earnings (19.8% per year) are forecast to grow faster than the US market (15.4% per year).

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

Revenue vs Market: RCII's revenue (12.9% per year) is forecast to grow faster than the US market (8.8% per year).

High Growth Revenue: RCII's revenue (12.9% 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


Past Performance

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

84.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RCII has a large one-off loss of $64.0M impacting its March 31 2021 financial results.

Growing Profit Margin: RCII's current net profit margins (6.4%) are lower than last year (8.1%).


Past Earnings Growth Analysis

Earnings Trend: RCII has become profitable over the past 5 years, growing earnings by 84.7% per year.

Accelerating Growth: RCII's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: RCII had negative earnings growth (-6.6%) over the past year, making it difficult to compare to the Specialty Retail industry average (48.7%).


Return on Equity

High ROE: Whilst RCII's Return on Equity (27.13%) is high, this metric is skewed due to their high level of debt.


Financial Health

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


Financial Position Analysis

Short Term Liabilities: RCII's short term assets ($284.9M) do not cover its short term liabilities ($645.5M).

Long Term Liabilities: RCII's short term assets ($284.9M) do not cover its long term liabilities ($1.6B).


Debt to Equity History and Analysis

Debt Level: RCII's debt to equity ratio (179.5%) is considered high.

Reducing Debt: RCII's debt to equity ratio has increased from 150.1% to 179.5% over the past 5 years.

Debt Coverage: RCII's debt is well covered by operating cash flow (24.4%).

Interest Coverage: RCII's interest payments on its debt are well covered by EBIT (14.2x coverage).


Balance Sheet


Dividend

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

2.22%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: RCII's dividend (2.22%) is higher than the bottom 25% of dividend payers in the US market (1.25%).

High Dividend: RCII's dividend (2.22%) is low compared to the top 25% of dividend payers in the US market (3.43%).


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 (32%), 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 (18.9% payout ratio).


Next Steps

Management

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

3.3yrs

Average management tenure


CEO

Mitch Fadel (63 yo)

3.33yrs

Tenure

US$9,217,950

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 ($USD9.22M) is above average for companies of similar size in the US market ($USD5.33M).

Compensation vs Earnings: Mitch's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: RCII's management team is considered experienced (3.3 years average tenure).


Board Members

Experienced Board: RCII's board of directors are not considered experienced ( 1.9 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 sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 23.3%.


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: 1960
  • Industry: Computer and Electronics Retail
  • Sector: Retail
  • Market Cap: US$3.914b
  • Shares outstanding: 66.31m
  • Website: https://www.rentacenter.com

Number of Employees


Location

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

Listings


Biography

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


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/05/12 22:27
End of Day Share Price2021/05/12 00:00
Earnings2021/03/31
Annual Earnings2020/12/31


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.