As part of our ongoing series here at The Acquirer’s Multiple, we provide this feature article titled ‘Stock in Focus‘ where we focus on one of the stocks from our Stock Screeners.
One of the cheapest stocks in our Stock Screeners is:
Rent-A-Center Inc (RCII)
Rent-A-Center Inc offers rent-to-own purchasing options for appliances, computers, smartphones, furniture, and related items. Customers make rental payments with the option to own the product after completing rent-to-own agreements. The company’s operating segments are Rent-a-Center business, which includes company-owned stores and online platform; preferred lease, which provides lease-to-own options through third-party retailers; Mexico, which includes company-owned stores in Mexico; and franchising, which sells rental merchandise to intermediate franchisees for royalties and startup fees. The majority of revenue comes from repeat customers in the Rent-a-Center business segment of the U.S.
A quick look at the share price history (below) over the past twelve months shows that the price is down 58%. Here’s why the company is undervalued.
Summary
Market Cap: $1.56 Billion
Enterprise Value: $3.17 Billion
Operating Earnings
Operating Earnings: $405 Million
Acquirer’s Multiple
Acquirer’s Multiple: 7.82
Free Cash Flow (TTM)
Free Cash Flow: $394 Million
FCF/EV Yield
FCF/EV Yield: 25%
Shareholder Yield:
Shareholder Yield: 29.60
Other Indicators
Piotroski F-Score: 3
Altman Z-Score: 2.81
ROA (5 Year Avge): 14.57
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