Aaron's, Inc.

Aaron's, Inc. (AAN) has traded well ahead of the market over the past year, spiking on a record first quarter. The company, which offers an industry-leading yield of 0.21%, recently declared a dividend of $.017 per share.

Company Description

Aaron Rents caters to the moderate-income customer, offering affordable payment plans and quality merchandise. The company is considered a pioneer in the furniture rental industry, leasing and selling residential and office furniture, consumer electronics as well as home appliances and accessories.

The company was founded by R. Charles Loudermilk, Sr. who has held the position of Chairman since it’s inception in 1955. Aaron Rents has more than 1,590 company operated and franchised stores in the United States and Canada. The Company also manufactures furniture and bedding at 12 facilities in five states.

Rewarding Shareholders with Income

Aaron Rents, which offers an industry-leading yield of 0.21%, recently declared a dividend of $.017 per share. The dividend is payable July 6 to shareholders of record as of the close of business on June 5.

Record Results

The company reported record first-quarter results in late April. Earnings per share of 65 cents topped the previous year’s 46 cents and soared past the consensus estimate by 27.5%. Revenues jumped 15% year-over-year to $474 million.

Management stated the record results exceeded the company’s expectations, adding that business has been especially strong in recent quarters as more consumers are finding it extremely attractive to use the Aaron's option of obtaining basic home furnishings necessities with no credit checks and the ability to return the merchandise at any time.

Shares spiked on the strong quarter and have been trading higher since. During the past year, AAN gained more than 40%, the major averages are in the negative by more than 20%.

Bullish Estimates

Wall Street has RNT’s full-year 2009 earnings per share pegged at $2.00 per share, up from $1.81 over the past 2 months. For the following year, projections of $2.25 were increased from $2.05 over the past 2 months.

The company boasts a strong record of beating earnings expectations, outpacing the consensus estimate by an average of 17% over the past 4 straight quarters.

AAN’s earnings are projected to grow about 13% over the next 3 - 5 years, which is in line with the industry average.

Read the full analyst report on AAN