Equifax Inc. - Growth & Income


Estimates have been surging for Equifax Inc. ( EFX ) after the company delivered strong fourth quarter results on February 8.

It is a Zacks #2 Rank (Buy) stock.

Based on current consensus estimates, analysts project 12% EPS growth this year and 11% growth next year. This is in-line with management's target EPS growth rate between 10-13% over the next three years.

On top of this, the company pays a dividend that yields a solid 1.5%.

Company Description

Equifax is one of the three major consumer credit reporting agencies in the United States. It was founded in 1899 and is headquartered in Atlanta, Georgia. It has a market cap of $5 billion.

Fourth Quarter Results

Equifax reported better than expected results for the fourth quarter on February 8. Earnings per share came in at 68 cents, beating the Zacks Consensus Estimate by a penny. It was a 10% increase over the same quarter in 2010.

Revenue rose 10% to $509.7 million, ahead of the Zacks Consensus Estimate of $502.0 million. This was driven in large part by a 13% increase in Total U.S. Consumer Information Solutions.

Meanwhile, the operating margin expanded from 22.8% of revenue to 24.7% in the quarter.


Following strong Q4 results, analysts raised their estimates significantly higher for both 2012 and 2013, sending the stock to a Zacks #2 Rank (Buy).

The Zacks Consensus Estimate for 2012 is now $2.82, representing 12% growth over 2011 EPS. The 2013 consensus estimate is currently $3.13, corresponding with 11% growth.

This is in-line with the company's 3-year target of 10-13% EPS growth on revenue growth of 7-10% with steady margin expansion and financial leverage.


Equifax also offers a dividend that yields a solid 1.5%.

After holding its quarterly dividend steady at 4 cents per share for several years, Equifax boosted it to 16 cents in late 2010.


Although shares are up 7% since the company reported its fourth quarter results, the valuation picture still looks reasonable. Shares trade at 14.9x 12-month forward earnings, in-line with its historical median.

And its price to book ratio of 3.0 is well below its 10-year median of 5.1.

The Bottom Line

With strong EPS growth forecasts, rising estimates, a solid dividend and reasonable valuation, Equifax offers attractive total return potential.

Todd Bunton is the Growth & Income Stock Strategist for Zacks Investment Research and Co-Editor of the Reitmeister Value Investor .

EQUIFAX INC ( EFX ): Free Stock Analysis Report
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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Investing Ideas , Stocks

Referenced Stocks: EFX



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