Tags: Equifax | emerging | markets | EFX

Equifax Looks Outward for Emerging Market Growth

Wednesday, 09 May 2012 10:53 AM

By Greg Brown

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Equifax (EFX) already is a powerful credit information brand in the United States. It’s one of the three major credit history trackers Americans know by name. Now it is looking outward into payroll and human resources businesses for growth, as well as to the emerging markets, where rapid deployment of technology could help businesses leapfrog into state-of-the-art management at a lower cost.

Equifax is a global provider of consumer and business information derived from numerous types of credit, financial, employment, income, public record, demographic and marketing data. In addition, the company is a provider of payroll and human resources business process outsourcing services in the United States.

Equifax currently operates in three global regions: North America (U.S. and Canada), Europe (the United Kingdom, Spain and Portugal) and Latin America (Argentina, Chile, Costa Rica, Ecuador, El Salvador, Honduras, Paraguay, Peru and Uruguay).

In addition, the company maintains support operations in Ireland, Chile and Costa Rica. It has an investment in the second-largest consumer and commercial credit information company in Brazil and offers credit services in Russia and India through joint ventures.

“Our strategic objective is to be the trusted provider of information-driven solutions that empower our customers with the ability to make critical decisions with greater confidence. Data is at the core of our value proposition,” management told investors in a recent filing.

Equifax had approximately 6,500 employees in 15 countries as of the end of 2011.

The company has a market cap of $5.49 billion in a sector, professional services, where the average company size is $980.03 billion. Its trailing 12-month P/E ratio is 22.82 and its five-year projected price-to-earnings-growth (PEG) ratio is 1.89, compared to 2.24 for the sector.

Its projected earnings per share growth for the coming year is 10.34 percent, lower than the sector average at 18.54 percent.

Margins widening


Analysts are bullish on Equifax, with buy or outperform ratings from Raymond James, Goldman Sachs, Ned Davis Research and SunTrust Robinson Humphrey.

“As market conditions improve, we expect EFX to increase investments in international markets, especially in India and the U.K. As a result, and with new products — especially in workforce solutions — and improved operating leverage and execution, we believe operating margins (EBITDA) will widen to above 33 percent in 2012, from 32.4% in 2011,” S&P analysts wrote recently.

Equifax next reports on July 25.

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