Equifax Inc. (EFX - Free Report) yesterday announced the launch of an instant alert — The Work Number Indicator — that will notify the existence of any individual’s employment and income record in The Work Number database. The Work Number database — a product of Equifax Verification Services — is one of the nation’s largest sources of authentic employment and income information with a current database of more than 5,500 employers from all over the United States.
This is an initiative taken up by Equifax to aid the mortgage industry which is trying to adapt to consumer preferences and get more digitalized to strengthen its position.
The Work Number Indicator, which comes with a credit report, provides lenders access to the current employment and income status of their borrowers, in order to help them analyze the latter’s payback ability. This not only saves time by avoiding the elaborate documentation process involved in granting a loan but also increases work efficiency, thereby making customer dealings easier than before. The indicator maintains a record of any changes in employment on any customer or client portfolio.
Notably, Equifax’s The Work Number seems to have gained popularity in the market. On Apr 10, 2018, AmeriSave Mortgage Corporation reported a 15% improvement in mortgage origination efficiency by utilizing The Work Number report for verification of employment and income (VOE/VOI). On Jan 27, 2017, Equifax and Fiserv, Inc. (FISV) had collaborated to ease out the loan approval process by linking Equifax’s The Work Number with Fiserv's Automotive Loan Origination System.
The offering is expected to complement Equifax’s growing Verification Services, thereby boosting its Workforce Solutions segment. The Workforce Solutions segment accounts for nearly 22-23% of Equifax’s total yearly revenues.
In 2017, Verification Services contributed the largest chunk (around 66%) to Workforce Solutions revenues. Verification Services revenues increased almost 38% from $364.4 million in 2015 to $501.5 million in 2017. Additionally, in first-quarter 2018, the service reported 12% growth from the year-ago quarter due to robust government, financial, mortgage, and pre-employment activities along with continuous addition of new records to The Work Number database.
Zacks Rank & Price Performance
Currently, Equifax has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
We observe that shares of Equifax have returned 0.6% but underperformed the industry’s gain of 19.2% in the past six months.
Stocks to Consider
Some better-ranked stocks in the broader Business Services sector include Verifone Systems, Inc. , FLEETCOR Technologies, Inc. (FLT - Free Report) and WEX Inc. (WEX - Free Report) . While Verifone and FLEETCOR Technologies currently carry a Zacks Rank #2 (Buy), WEX sports a Zacks Rank #1.
The long-term expected earnings per share growth rate for Verifone, FLEETCOR Technologies and WEX is 14.9%, 16.5% and 14.3%, respectively.
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