Comparing Rent-A-Center (NASDAQ:RCII) and AeroCentury (NYSE:ACY)

Rent-A-Center (NASDAQ:RCII) and AeroCentury (NYSE:ACY) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, institutional ownership, valuation, dividends and profitability.

Volatility & Risk

Rent-A-Center has a beta of 1.55, suggesting that its stock price is 55% more volatile than the S&P 500. Comparatively, AeroCentury has a beta of 2.35, suggesting that its stock price is 135% more volatile than the S&P 500.

Valuation and Earnings

This table compares Rent-A-Center and AeroCentury’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rent-A-Center $2.67 billion 0.69 $173.55 million $2.24 15.16
AeroCentury $25.61 million 0.12 -$16.66 million N/A N/A

Rent-A-Center has higher revenue and earnings than AeroCentury.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Rent-A-Center and AeroCentury, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rent-A-Center 0 3 2 1 2.67
AeroCentury 0 0 0 0 N/A

Rent-A-Center presently has a consensus target price of $30.40, suggesting a potential downside of 10.46%. Given Rent-A-Center’s higher probable upside, equities analysts clearly believe Rent-A-Center is more favorable than AeroCentury.

Institutional & Insider Ownership

98.6% of Rent-A-Center shares are held by institutional investors. Comparatively, 3.8% of AeroCentury shares are held by institutional investors. 0.8% of Rent-A-Center shares are held by company insiders. Comparatively, 22.6% of AeroCentury shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Rent-A-Center and AeroCentury’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rent-A-Center 5.90% 30.41% 9.00%
AeroCentury -199.66% -256.67% -16.29%

Summary

Rent-A-Center beats AeroCentury on 11 of the 13 factors compared between the two stocks.

Rent-A-Center Company Profile

Rent-A-Center, Inc., together with its subsidiaries, leases household durable goods to customers on a lease-to-own basis. The company operates through four segments: Rent-A-Center Business, Preferred Lease, Mexico, and Franchising. It offers consumer electronics, computers, tablets, smartphones, furniture and accessories, appliances, wheels and tires, tools, handbags, jewelry, and other accessories under rental purchase agreements. The company also provides merchandise on an installment sales basis; and lease-to-own transaction to consumers who do not qualify for financing from the traditional retailer through kiosks located within retailer's locations. It operates retail installment sales stores under the Get It Now and Home Choice names; lease-to-own and franchised lease-to-own stores under the Rent-A-Centre, ColorTyme, and RimTyme names; and rentacenter.com, an e-commerce platform. As of December 31, 2019, the company owned and operated approximately 1,973 stores in the United States and Puerto Rico, including 44 retail installment sales stores; 998 Preferred Lease staffed locations in 41 states and Puerto Rico; and 123 stores in Mexico, as well as franchised 372 lease-to-own stores in 33 states. Rent-A-Center, Inc. was founded in 1986 and is headquartered in Plano, Texas.

AeroCentury Company Profile

AeroCentury Corp., together with its subsidiaries, provides leasing and finance services to regional airlines worldwide. The company primarily engages in leasing its aircraft portfolio consisting of mid-life regional aircraft through operating and finance leases. It also sells aircraft from its operating lease portfolio to third parties, which include other leasing companies, financial services companies, and airlines. As of March 30, 2020, the company's aircraft portfolio consisted of eleven aircraft held for lease, six aircraft held under sales-type or direct finance leases, and seven aircraft held for sale. AeroCentury Corp. was founded in 1989 and is headquartered in Burlingame, California.