), the largest rent-to-own operator in the U.S, announced the
opening of a new store in Northport, Alabama.
The company, through its latest store, will offer furnishings,
electrical devices, electronics and computers. With the inclusion
of this new store, Rent-A-Center will conduct operations through
58 locations in Alabama.
The move reflects the company's strategic approach of
leveraging an extensive network of stores to effectively
penetrate into its target markets, which in turn facilitates it
to generate healthy sales and gain competitive advantage over its
) and Advance America.
Rent-A-Center plans to open approximately 35 domestic
rent-to-own stores for 2012. Through the year, the company
targets to open 40 rent-to-own locations in Mexico and 6 in
Canada. Moreover, the company aims at 300 domestic RAC Acceptance
Earlier this week, the company hiked its dividend by 31% to 21
cents (or 84 cents annually) from 16 cents a share (or 64 cents
annually). The company announced that the increased dividend will
be paid on January 24, 2013 to stakeholders of record as on
January 3, 2013.
Rent-A-Center offers consumer electronics, appliances and
furniture products under rental purchase schemes that allow
customers to own the merchandise upon the completion of the
rental period. Due to continued tightening of the credit market,
customers view rent-to-own as a more flexible and viable option
compared to credit. However, the sluggish recovery and a fragile
job market may make customers reluctant to enter new
Currently, we maintain our long-term 'Neutral' recommendation
on the stock. Moreover, Rent-A-Center retains a Zacks #3 Rank
that translates into a short-term 'Hold' rating.
AARONS INC (AAN): Free Stock Analysis Report
RENT-A-CENTER (RCII): Free Stock Analysis
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