A Long-Term Winner with 2012 Upside


Charles Carlson Image Charles Carlson Editor, DRIP Investor

This stock has plenty of legs for the long haul in both its management team and its sector dominance but there could be a nice bump by the time New Year's Eve arrives notes Charles Carlson of DRIP Investor.

Among my Editor’s Portfolio stocks, none is probably better situated for short-term gains than Equifax (EFX).

The firm is a leader in information solutions, leveraging one of the largest sources of consumer and commercial data. It provides consumer-credit information, business-credit intelligence, fraud detection, and various marketing, human-resources, and e-commerce services.

The stock, which has been especially strong in recent months in moving to an all-time high, has much to recommend at this time. An uptick in the housing and rental markets should spur increased demand for the company’s various consumer-credit services. Record per-share profits this year and next should provide support to the stock. Dividends should grow by double digits over the next 12 months.

I’ve always been a fan of companies that control large amounts of data. Profit margins are typically high for such companies that can generate a constant stream of new products and services from its vast database of information. Equifax is the poster child for such a business.

To be sure, the firm is not without its risks. Given the nature of its business, Equifax is vulnerable to governmental investigations and potential increased regulations as to how its data can be used.