Tags: Equifax | expansion | M&A | EFX

Equifax Growing on Expansion, M&A

By    |   Monday, 06 Feb 2012 08:13 AM

Information services company Equifax (EFX) is one of the three companies which provide credit reports on consumers who want to borrow money. The company is growing through mergers & acquisitions (M&A) and expansion of products and services it offers.

Equifax collects consumer and commercial data and sells that data to businesses and government entities in a wide range of reports and packages. Best known is the individual credit report supplied by Equifax when an individual applies for a loan.

Equifax products are used in the mortgage, banking and insurance industries. Just over half of the company's revenues come from consumer and business products sold in the United States, a quarter from international operations, and the remaining portion is from the employment tracking TALX subsidiary.

For the 2011 third quarter, Equifax reported revenue of growth of 8 percent year-over-year to $490 million. Adjusted earnings were 65 cents per share, also up 8 percent from a year earlier.

The third quarter was a turnaround from the second quarter results, when the company posted a significant loss in its Brazilian operations. The Wall Street earnings estimate for the full year 2011 is $2.52 per share, compared to $2.36 earned in 2010.

Wall Street expects the company to earn $2.74 in 2012.

Priced above $39 in early 2012, Equifax was trading at a 52-week and post-2009 bear market high. The share price gained 60 percent in 18 months.

However, there had been two significant share value dips during that period. The share price declined by more than 20 percent in the second quarter of 2011, falling until the announcement of the Brazil division merger into a Brazilian company.

Discounted


Equifax puts up pretty steady year-over-year growth numbers, but the market is quick to discount the stock on bad news.

Nevertheless, at the end of 2010, Equifax quadrupled the dividend to 16 cents quarterly from the previous 4 cents. The current yield is 1.6 percent.

The analysts at Credit Suisse recently reiterated a neutral rating on Equifax. Barclays Capital analysts have maintained their equal weight rating even as the stock value has moved well above their target price.

The company reports next on Feb. 8.

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2012-13-06
Monday, 06 Feb 2012 08:13 AM
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