Equifax (EFX) Hits a 52-Week High on Strategic Initiatives - Analyst Blog

Shares of Equifax Inc. (EFX) hit a new 52-week high of $80.00 on Nov 26, the last trading day before Thanksgiving Day. The stock eventually closed at $79.35, representing a one-year return of 19.1% and a year-to-date return of 17.5%. The average trading volume for the last three months aggregated approximately 523K shares.

Some of the optimism surrounding the stock can be attributed to the company'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 targeted at product innovation, expansion of data assets through acquisitions and continuous share gains in North America are encouraging.

Apart from this, Equifax has been entering into partnerships to expand its product portfolio and boost market share.

Income seeking investors also continue to be rewarded with consistent dividends and share repurchases.

During third-quarter 2014, the company paid dividends of 25 cents per share and repurchased stocks worth $113.1 million. The company has also initiated a new buyback plan worth $400 million in Sep 2014.

The company's performance in the last-reported quarter was also not too bad with the bottom line beating the Zacks Consensus Estimate despite the top line falling short. The company's adjusted earnings per share from continuing operations increased 12.2% year over year to $1.01 mainly due to a 7.2% rise in revenues and improvement in margins.

Further, considering the recent domestic and international business environment, current foreign exchange rates and the expected slowdown in mortgage activities, Equifax provided tepid fourth-quarter guidance. Revenues are expected to range between $615 million and $620 million (mid-point $617.5 million), while the Zacks Consensus Estimate stands at $618 million. Earnings are forecasted to be between 99 cents and $1.03 (mid-point $1.01). The Zacks Consensus Estimate is pegged at $1.02.

Currently, Equifax carries a Zacks Rank #3 (Hold). Investors may consider better-ranked stocks like Envestnet Inc. (ENV), Global Payments Inc. (GPN) and The Western Union Company (WU). While Envestnet sports a Zacks Rank #1 (Strong Buy), Global Payments and Western Union have a Zacks Rank #2 (Buy).