) hit a new 52-week high of $38.50 on Tuesday, Jun 11, driven by
the company's recent announcements of debt issuance and enhanced
share repurchase authorization. The stock eventually closed at
$38.33, representing a year-to-date return of approximately 9.2%.
Average volume of shares traded over the last 3 months stands at
AARONS INC (AAN): Free Stock Analysis Report
RENT-A-CENTER (RCII): Free Stock Analysis
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V F CORP (VFC): Free Stock Analysis Report
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A consistent track record of returning cash to its shareholders
in the form of share repurchase and dividend payment as well as a
healthy balance sheet have enabled the shares of Rent-A-Center to
touch the new high.
Following the disappointing first-quarter results in April, the
company made the right move to win investor confidence by
expanding its current share repurchases authorization to $1.25
billion from $1 billion. Since the inception of the share buyback
program, the company has repurchased 31,585,314 shares for
approximately $794.8 million. Moreover, it bought back 465,035
shares for approximately $17.4 million during the last reported
In another move, in May, the company priced a new $250 million
senior unsecured notes offering, with an interest rate of 4.75%
per annum and maturity due in 2021. The company expects to use a
portion of the funds from the offering to repay its loans under
its revolving credit facility worth $46 million. The remainder of
the proceeds will be directed toward enhancing shareholder value
by buying back shares and for general development of its
Apart from the above mentioned activities, the company regularly
indulges in rewarding shareholders with quarterly dividend
payments. Since the inception of its dividend program, the
company has raised its dividend rate from the initial 6 cents per
share to the current 21 cents per share, the last upside being
announced in Dec 2012. This brings the company's annual dividend
rate to 84 cents per share, with the payout ratio currently
standing at 23.0%.
Alongside its well recognized shareholder-friendly moves, we
favor the company's extensive network of more than 4,000 stores,
which makes it the largest rent-to-own operator in the U.S. The
sheer geographic reach enables the company to effectively
penetrate its target markets and gain a competitive advantage
over its competitors, such as
), and Advance America.
Moreover, we believe that the company is gaining traction with
its new business model called RAC Acceptance as it enhances
consumers' shopping experience. Revenue from the RAC Acceptance
business surged 45% during the first quarter of 2013. We also
appreciate the company's efforts to optimize rental merchandise
levels in accordance with sales trends, through the
implementation of a centralized inventory management system
including automated merchandise replenishment.
Simultaneously, companies such as
) achieved new 52-week highs of $15.79 and $189.64, respectively,
on Tuesday, Jun 11.