Growth Rates Picking Up For Equifax


Growth is good, but also pay attention to acceleration in earnings and sales. One such firm showing a pickup in its top and bottom lines isEquifax ( EFX ).

The Atlanta-based company is best known as one of the big three credit reporting agencies. It also provides a range of information and analytical services for individuals and businesses.

In late July, Equifax reported a 28% jump in second-quarter earnings. That marked its biggest gain in years, as well as the second straight quarter of accelerating growth. Profit grew 26% and 15% in the prior two quarters.

Sales rose 14% in the latest period. That was the best in years and the second straight period of acceleration. Results were boosted by last year's $1-billion buyout ofComputer Sciences' ( CSC ) credit services unit.

Profit and revenue has grown in most recent years, except for 2009. Equifax has a three-year Earnings Stability Factor of 2, signaling a rock steady stream of profits.

The company has paid cash dividends each year since 1920. In recent years, Equifax has bumped up its dividend sharply from a quarterly rate of 4 cents a share in Q3 2010 to the current rate of 22 cents a share. The company has a policy of returning 25% to 35% of net income to shareholders.

Equifax pays 88 cents a share annually, giving it a yield of about 1.3% -- the second lowest in the Financial Services-Specialty group. But Equifax has one of the better Composite Ratings among its peers.

Earlier this month, Equifax cleared a 64.01 buy point from a third stage, shallow cup base. It's still within buying range. Despite recent market volatility, the stock stretched its win streak to seven straight weeks. Most of its weekly price gains have come in above-average volume.

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: Personal Finance , Investing Ideas

Referenced Stocks: CSC , EFX

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