Critical Review: Equifax (EFX) vs. Its Competitors

Equifax (NYSE: EFX) is one of 27 publicly-traded companies in the “Professional Information Services” industry, but how does it compare to its competitors? We will compare Equifax to similar companies based on the strength of its dividends, institutional ownership, valuation, profitability, risk, analyst recommendations and earnings.

Dividends

Equifax pays an annual dividend of $1.56 per share and has a dividend yield of 1.4%. Equifax pays out 33.1% of its earnings in the form of a dividend. As a group, “Professional Information Services” companies pay a dividend yield of 1.5% and pay out 31.9% of their earnings in the form of a dividend. Equifax has raised its dividend for 5 consecutive years. Equifax lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Volatility & Risk

Equifax has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, Equifax’s competitors have a beta of 0.99, suggesting that their average stock price is 1% less volatile than the S&P 500.

Valuation & Earnings

This table compares Equifax and its competitors top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Equifax $3.29 billion $1.22 billion 23.59
Equifax Competitors $3.41 billion $997.58 million 16.79

Equifax’s competitors have higher revenue, but lower earnings than Equifax. Equifax is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Equifax and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Equifax 17.44% 24.88% 10.51%
Equifax Competitors 6.96% 27.28% 5.01%

Analyst Recommendations

This is a summary of recent recommendations for Equifax and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Equifax 1 3 11 0 2.67
Equifax Competitors 72 504 675 6 2.49

Equifax presently has a consensus target price of $130.27, indicating a potential upside of 17.00%. As a group, “Professional Information Services” companies have a potential downside of 3.39%. Given Equifax’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Equifax is more favorable than its competitors.

Insider & Institutional Ownership

90.0% of Equifax shares are owned by institutional investors. Comparatively, 58.7% of shares of all “Professional Information Services” companies are owned by institutional investors. 1.3% of Equifax shares are owned by insiders. Comparatively, 12.2% of shares of all “Professional Information Services” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Equifax beats its competitors on 8 of the 15 factors compared.

About Equifax

Equifax Inc. is a global provider of information solutions and human resources business process outsourcing services for businesses, governments and consumers. The Company operates in four segments: U.S. Information Solutions (USIS), International, Workforce Solutions and Global Consumer Solutions. Its products and services are based on databases of consumer and business information derived from various sources, including credit, financial assets, telecommunications and utility payments, employment, income, demographic and marketing data. It uses statistical techniques and software tools to analyze all available data, creating customized insights, decision-making solutions and processing services for its clients. It helps consumers understand, manage and protect their personal information and make more informed financial decisions. The Company also provides information, technology and services to support debt collections and recovery management.

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