Critical Comparison: Rent-A-Center (RCII) versus Staples (SPLS)
Staples (NASDAQ: SPLS) and Rent-A-Center (NASDAQ:RCII) are both retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their profitabiliy, risk, valuation, earnings, institutional ownership, analyst recommendations and dividends.
Insider & Institutional Ownership
92.4% of Staples shares are held by institutional investors. Comparatively, 96.8% of Rent-A-Center shares are held by institutional investors. 0.7% of Staples shares are held by company insiders. Comparatively, 3.4% of Rent-A-Center shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Staples pays an annual dividend of $0.48 per share and has a dividend yield of 5.4%. Rent-A-Center pays an annual dividend of $0.32 per share and has a dividend yield of 2.7%. Staples pays out -13.3% of its earnings in the form of a dividend.
This is a breakdown of recent ratings and price targets for Staples and Rent-A-Center, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Staples presently has a consensus price target of $8.83, indicating a potential downside of 0.08%. Rent-A-Center has a consensus price target of $10.75, indicating a potential downside of 8.28%. Given Staples’ higher possible upside, analysts clearly believe Staples is more favorable than Rent-A-Center.
Earnings and Valuation
This table compares Staples and Rent-A-Center’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Staples||$18.03 billion||0.32||$1.26 billion||($3.61)||-2.45|
|Rent-A-Center||$2.87 billion||0.22||$145.79 million||N/A||N/A|
Staples has higher revenue and earnings than Rent-A-Center.
This table compares Staples and Rent-A-Center’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk & Volatility
Staples has a beta of 1.69, meaning that its stock price is 69% more volatile than the S&P 500. Comparatively, Rent-A-Center has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500.
Staples beats Rent-A-Center on 9 of the 15 factors compared between the two stocks.
Staples, Inc. (Staples) is a provider of products and services that serve the needs of business customers and consumers. The Company offers a range of print and marketing and technology services. The Company’s segments include North American Delivery, North American Retail and Other. The North American Delivery segment consists of the United States and Canadian businesses, including Staples Business Advantage, staples.com, staples.ca, and quill.com, that sell and deliver products and services primarily to businesses. The North American Retail segment includes its retail stores in the United States and Canada. As of January 28, 2017, its North American Retail segment consisted of 1,255 stores in the United States and 304 stores in Canada. The Company has other businesses in Australia, South America and Asia. Staples Australia serves primarily contract and government customers in Australia and New Zealand. The Company also has operations in China, Argentina, Taiwan and Brazil.
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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