NEW YORK (
-- DFC Global
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, compelling growth in net income and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 3.9%. Since the same quarter one year prior, revenues rose by 44.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- DFC GLOBAL CORP has improved earnings per share by 8.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DFC GLOBAL CORP turned its bottom line around by earning $1.67 versus -$0.14 in the prior year. This year, the market expects an improvement in earnings ($2.11 versus $1.67).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Consumer Finance industry average. The net income increased by 30.3% when compared to the same quarter one year prior, rising from $20.10 million to $26.20 million.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Consumer Finance industry and the overall market, DFC GLOBAL CORP's return on equity is below that of both the industry average and the S&P 500.
- Although DLLR's debt-to-equity ratio of 2.16 is very high, it is currently less than that of the industry average. Even though the debt-to-equity ratio is weak, DLLR's quick ratio is somewhat strong at 1.40, demonstrating the ability to handle short-term liquidity needs.
DFC Global Corp. provides retail financial services to unbanked and under-banked consumers, and small businesses. Its primary products and services include short-term consumer loans, single-payment consumer loans, check cashing services, secured pawn loans, and gold buying services. The company has a P/E ratio of 12, below the average financial services industry P/E ratio of 13.9 and below the S&P 500 P/E ratio of 17.7. DFC Global has a market cap of $785.9 million and is part of the
industry. Shares are up 13.7% year to date as of the close of trading on Friday.
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