Shares of Equifax Inc. EFX hit a new 52-week high of $105.90 on Oct 12. The company has been gaining significantly on the back of ongoing growth initiatives, product innovation, shareholder-friendly moves and impressive quarterly results. Notably, the company returned more than 31% in the past one year.
Some of the optimism surrounding the stock may be attributed to Equifax’s strong correlation to consumer and financial markets as well as its U.S. and European exposure, which is seeing a gradual uptick. Moreover, strategic initiatives including product innovation, expansion of data assets through acquisitions and continuous share gains in North America are encouraging.
Apart from this, Equifax has been enhancing the product portfolio and increasing market share through partnerships.
The regular dividends and share repurchases also keep investors interested in the stock. During the first two quarters, the company paid $69 million as dividend and repurchased $182.2 million stocks.
Equifax reported better-than-expected second-quarter 2015 results which improved year over year as well. The company’s adjusted earnings per share from continuing operations of $1.15 surpassed the Zacks Consensus Estimate of $1.10 and increased 19.5% from the year-ago quarter mainly backed by 10.5% rise in revenues and margin expansions.
Notably, Equifax surpassed the Zacks Consensus Estimate in three out of the last four quarters with an average positive earnings surprise of 2.87%. Backed by the strong results, the company raised the full-year outlook and issued encouraging third-quarter guidance.
Furthermore, Equifax has made strategic acquisitions to supplement its core business. Last month, the company entered into a non-binding offer to acquire Veda Group Limited, a leading Australian credit information provider, to broaden its global operations. In 2014, the company took over TDX Group and Forseva. The company expects to derive 1% to 2% revenue growth from these buyouts over the long term.
Additionally, Equifax expands internationally through joint ventures that contain operating costs and do not require integration time while diversifying the revenue source.
However, stiff competition and a highly leveraged balance sheet are the concerns.
Equifax currently carries a Zacks Rank #2 (Buy).
Stocks to Consider
Other well-ranked stocks in the broader technology sector are Visa Inc. V, Fiserv Inc. FISV and JetPay Corporation JTPY. While Visa sports a Zacks Rank #1 (Strong Buy), Fiserv and JetPay have the same Zacks Rank as Equifax.
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