Financial Contrast: Aaron’s (AAN) vs. FlexShopper (FPAY)

Aaron’s (NYSE:AAN) and FlexShopper (NASDAQ:FPAY) are both retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, analyst recommendations, institutional ownership, profitability and risk.

Risk & Volatility

Aaron’s has a beta of 0.25, indicating that its share price is 75% less volatile than the S&P 500. Comparatively, FlexShopper has a beta of 0.15, indicating that its share price is 85% less volatile than the S&P 500.

Profitability

This table compares Aaron’s and FlexShopper’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aaron’s 8.39% 12.22% 7.96%
FlexShopper -13.86% N/A -35.85%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Aaron’s and FlexShopper, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aaron’s 0 2 8 0 2.80
FlexShopper 0 0 0 0 N/A

Aaron’s currently has a consensus price target of $55.67, suggesting a potential upside of 13.79%. Given Aaron’s’ higher probable upside, research analysts clearly believe Aaron’s is more favorable than FlexShopper.

Earnings & Valuation

This table compares Aaron’s and FlexShopper’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Aaron’s $3.38 billion 0.99 $292.53 million $2.56 19.11
FlexShopper $67.05 million 0.08 -$8.33 million N/A N/A

Aaron’s has higher revenue and earnings than FlexShopper.

Insider and Institutional Ownership

9.9% of FlexShopper shares are held by institutional investors. 2.3% of Aaron’s shares are held by insiders. Comparatively, 15.1% of FlexShopper shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Aaron’s pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. FlexShopper does not pay a dividend. Aaron’s pays out 4.7% of its earnings in the form of a dividend. Aaron’s has increased its dividend for 11 consecutive years.

Summary

Aaron’s beats FlexShopper on 11 of the 14 factors compared between the two stocks.

About Aaron’s

Aaron's, Inc. operates as an omnichannel provider of lease-purchase solutions. It operates through three segments: Progressive Leasing, Aaron's Business, and DAMI. The company engages in the sale, lease ownership, and specialty retailing of furniture, consumer electronics, home appliances, and accessories. As of February 15, 2018, it operated approximately 1,726 company-operated and franchised stores in 47 states and Canada, as well as its e-commerce platform, Aarons.com. Aaron's, Inc. was founded in 1955 and is headquartered in Atlanta, Georgia.

About FlexShopper

FlexShopper, Inc., through its wholly owned subsidiary, FlexShopper, LLC, provides various types of durable goods to consumers on a lease-to-own basis (LTO) to consumers of third party retailers and e-tailers. It offers products through FlexShopper.com, an LTO e-commerce marketplace; e-commerce sites and in-store terminals by utilizing FlexShopper's LTO payment method; and facilitation of LTO transactions with retailers. The company was formerly known as Anchor Funding Services, Inc. and changed its name to FlexShopper, Inc. in October 2013. FlexShopper, Inc. was founded in 2003 and is based in Boca Raton, Florida.

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