Back to top

Image: Bigstock

TransUnion (TRU) Stock Up 35.5% in a Year: What's Behind It?

Read MoreHide Full Article

Shares of TransUnion (TRU - Free Report) have gained 35.5% over the past year, outperforming the 24.2% surge of the industry it belongs to.

Zacks Investment Research
Image Source: Zacks Investment Research

Let’s delve into factors that have contributed to the company’s outperformance.

Consecutive Earnings & Revenue Beat

TransUnion reported better-than-expected earnings and revenue performance in the last four quarters. While operating efficiency has been aiding the company’s bottom line, strength across segments benefit the top line.

Upbeat 2021 Guidance

TransUnion has raised its guidance for 2021. Revenues are now expected to be between $2.949 billion and $2.992 billion compared with the prior guidance of $2.817-$2.877 billion. The Zacks Consensus Estimate of $2.98 billion lies within the updated guidance.

Adjusted earnings are now expected between $3.45 and $3.58 per share compared with the prior guidance of $3.16-$3.31. The Zacks Consensus Estimate of $3.58 is on par with the upper limit of the updated guidance.

Adjusted EBITDA is now anticipated to be between $1.157 billion and $1.189 billion compared with the prior guidance of $1.083-$1.121 billion.

Dividend Hike

On May 12, 2021, TransUnion announced that its board of directors has declared a dividend hike of approximately 27% to 9.5 cents per share. The dividend was paid out to shareholders on Jun 10, as of record date May 26.

During 2020, 2019 and 2018, TransUnion paid out dividends totaling $57.6 million, $56.8 million and $41.6 million, respectively. Such moves indicate the company’s commitment to create value for shareholders and also underline its confidence in its business. These shareholder-friendly initiatives not only instill investors’ confidence, but also positively impact earnings per share.

Zacks Rank and Stocks to Consider

TransUnion currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader Zacks Business Servicessector include Paychex (PAYX - Free Report) , Omnicom (OMC - Free Report) and Interpublic (IPG - Free Report) , each carrying a Zacks Rank #2 (Buy).

Long-term (three to five years) expected earnings per share growth rate for Paychex, Omnicom and Interpublic is projected at 8%, 9.9% and 10.2%, respectively.