I'm uncertain what CURO will do tomorrow after its mixed earnings report, lowish sales guidance, and announcement of a share buyback and first-ever dividend. What I do believe is that the initiation of a dividend will be quite bullish for the stock in the medium-to-long-term. Stocks that initiate a dividend for the first time tend, over the next 6-12 months, to move toward a higher multiple than they've traded at in the past.
CURO currently trades at about 7.5 P/E and 3.5 forward P/E, according to data from Fidelity. Its PEG ratio is an extraordinarily low 0.3, making it one of the most undervalued stocks in the entire market. On CURO, I think it's reasonable to expect forward P/E to come up into the 10-15 range, at least, over the next year. That would require roughly tripling the share price from its current extremely undervalued level. The dividend yield, by the way, is a little over 2% at the current price, so you have that to look forward to as well. CURO's share buyback should also help boost the price, and then of course there's the expected 3.5%-10.5% growth of adjusted earnings next year.
All in all, I think the signs point toward a strong future for CURO, and I likely will add some January 1 calls to the shares I already own.
CURO currently trades at about 7.5 P/E and 3.5 forward P/E, according to data from Fidelity. Its PEG ratio is an extraordinarily low 0.3, making it one of the most undervalued stocks in the entire market. On CURO, I think it's reasonable to expect forward P/E to come up into the 10-15 range, at least, over the next year. That would require roughly tripling the share price from its current extremely undervalued level. The dividend yield, by the way, is a little over 2% at the current price, so you have that to look forward to as well. CURO's share buyback should also help boost the price, and then of course there's the expected 3.5%-10.5% growth of adjusted earnings next year.
All in all, I think the signs point toward a strong future for CURO, and I likely will add some January 1 calls to the shares I already own.
Comment:
I told you so. :D