Earnings Preview: Rent-A-Center & How To Trade It (RCII, AAN)

Rent-A-Center, Inc RCII is set to report earnings tonight after the bell, and Wall Street will be looking to see how the new type of consumer is faring. At last check, shares of Rent-A-Center were off 21 cents to $34.10, a loss of 0.6%. Wall Street is looking for earnings of 85 cents per share on revenues of $754.58 million. This is up 5% from last year, when the company reported earnings of 77 cents on revenues of $718.42. Guidance is expected to come in at 77 cents per share on revenues of $671.54 million. The company trades at 13.1 times 2011 earnings, and sports a 0.7% dividend yield. The company is cheap on a growth metric, trading at 0.95 times price to earnings growth. If the company, which leases home goods to consumers, is able to report better than expected earnings and guidance, this could also boost shares of Aaron's, Inc. AAN, which is the prime competitor to Rent-A-Center. These two companies cater to people who don't have bank accounts, and are unable to purchase appliances or other goods at once. Rent-A-Center, Inc. primarily engages in leasing household durable goods to customers on a rent-to-own basis. The company's stores offer durable products.