Aarons Ability to Give People the Option of Renting to Own Is a Welcomed Model

Here in America, people are always looking to purchase the next thing but yet they can’t afford. That is a discussion in its own, but that has opened the window for payments which allow people to pay a little bit at a time. In comes Aaron’s, which allow people to rent the items and eventually pay them off and become an owner. From furniture to appliances, this gives people an opportunity to bring upgrades into their home and lives. Now, let us take a look at the recent numbers to determine the short term health.

Published over a year ago
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Reviewed by Ellen Johnson

These numbers can be found on the company’s 8-K SEC filing. Total revenues came in at $795 million for the fourth quarter of 2016 and $3.208 billion for the year. Diluted earnings per share were reported at $0.30 for the quarter and $1.91 for the year. The company also ended the year with $309 million in cash and net debt to total capitalization was 9.6%. Compare these numbers against the previous quarters and annual numbers, and that will give you a great idea of where the company has been and could be.

Now, taking a look at the chart using the monthly time frame, we can see that price has slowly been trending lower, which could indicate small but significant underlying issues. The company has also seen large down swings followed by slower retraces. It appears this stock moves quite quickly to the downside, so this may provide an element of volatility to your portfolio. Be sure to look at all the information at hand to formulate a well rounded opinion that can give you the best chance at success.

Typically, a company's financial statements are the reports that show the financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Aarons income statement, its balance sheet, and the statement of cash flows. Potential Aarons investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Aarons investors may use each financial statement separately, they are all related. The changes in Aarons's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Aarons's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.
The goal of Aarons fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Aarons performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Aarons shares is the value that is considered the true value of the share. If the intrinsic value of Aarons is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Aarons. Please read more on our fundamental analysis page.

How effective is Aarons in utilizing its assets?

The Aarons reports assets on its Balance Sheet. It represents the amount of Aarons resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Aarons aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Homefurnishing Retail space. To get a better handle on how balance sheet or income statements item affect Aarons volatility, please check the breakdown of all its fundamentals.

Are Aarons Earnings Expected to grow?

The future earnings power of Aarons involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Aarons factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Aarons stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Aarons expected earnings.

And What about dividends?

A dividend is the distribution of a portion of Aarons earnings, decided and managed by the company's board of directors and paid to a class of its shareholders. Note, announcements of dividend payouts are generally accompanied by a proportional increase or decrease in a company's stock price. Aarons dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment. Aarons one year expected dividend income is about USD0.32 per share.
At this time, Aarons' Dividend Yield is very stable compared to the past year. As of the 29th of March 2024, Dividend Payout Ratio is likely to grow to 5.58, though Dividends Paid is likely to grow to (14.2 M).
Last ReportedProjected for 2024
Dividends Paid-15 M-14.2 M
Dividend Yield 0.04  0.05 
Dividend Payout Ratio 5.31  5.58 
Dividend Paid And Capex Coverage Ratio(2.27)(2.39)
Investing in dividend-paying stocks, such as The Aarons is one of the few strategies that are good for long-term investment. Ex-dividend dates are significant because investors in Aarons must own a stock before its ex-dividend date to receive its next dividend.
This type of analysis is very useful when you want to generate a past dividend schedule and payout information for Aarons. Then that information in the form of graph and calendar can be used to fully explain how Du Pont dividends can provide a real clue to its valuation.

Aarons Gross Profit

Aarons Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Aarons previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Aarons Gross Profit growth over the last 10 years. Please check Aarons' gross profit and other fundamental indicators for more details.

Breaking down Aarons Indicators

Risks

For a full list of risks, take a look at the most recent 10-K filing as this will provide details on the risks. Now, here are a couple that you can use while completing your research. First, if the overall economy slows, people are going to be less likely to purchase the big ticket items, thus potentially hurting sales. Secondly, with the consolidating retail space, you have to watch for a potential sale of the company. It may never happen, but with recent events, it’s a good idea to keep that in the back of your mind.

Conclusion

This company gives people the ability to buy items they would otherwise be unable to afford. Certainly there is some risk that goes along with being in the retail space but the upside could be here. Be sure to complete an in depth review of the company to determine if it’s a good fit for your portfolio. If you get stuck and still have questions, be sure to reach out to an investing professional as they can help point you in the right direction.

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Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of The Aarons. Please refer to our Terms of Use for any information regarding our disclosure principles.

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