3/8/25
FirstCash Holdings, Inc. (FCFS) operates in a unique niche, providing pawn lending services across the United States and Latin America. The company serves individuals who need short-term cash in exchange for collateral like gold, jewelry, and electronics. This business model has proven to be quite resilient, especially during economic downturns when access to credit tightens.
While FirstCash isn’t a traditional high-yield dividend stock, it does offer a stable and growing payout backed by strong financials. For dividend investors looking for a mix of income and long-term stability, this stock is worth a closer look.
Key Dividend Metrics
📌 Dividend Yield: 1.32% (Forward)
💵 Annual Dividend: $1.52 per share
📈 5-Year Average Dividend Yield: 1.46%
💰 Payout Ratio: 25.48% (Sustainable)
📅 Ex-Dividend Date: February 14, 2025
📆 Next Dividend Payment Date: February 28, 2025
Dividend Overview
FirstCash has been a steady dividend payer, though it’s not necessarily an income-focused stock. The yield sits at 1.32%, which is relatively modest, but what stands out is its consistency. The company’s historical average dividend yield of 1.46% suggests stability rather than aggressive dividend growth.
One of the best indicators of a reliable dividend is the payout ratio, and FirstCash’s 25.48% suggests it has plenty of room to keep distributing cash to shareholders while also reinvesting in growth. The most recent dividend was paid on February 28, 2025, to shareholders who were on record by February 14, 2025. Given the company’s track record, it’s reasonable to expect continued payouts in the future.
Dividend Growth and Safety
While the yield may not be eye-catching, FirstCash has shown a commitment to increasing its dividend over time. The low payout ratio indicates there’s room for future raises, even if the company isn’t currently prioritizing rapid dividend expansion.
What makes FirstCash’s dividend particularly safe is its cash flow strength. With $539.96 million in operating cash flow and $665.71 million in free cash flow, it has more than enough to cover its dividend commitments. A payout ratio below 30% suggests the dividend won’t be at risk even if earnings fluctuate.
Another factor adding to its appeal is the stock’s relatively low volatility. With a beta of 0.62, it’s less sensitive to broader market swings, making it a stable choice for investors looking for consistency rather than speculation.
Chart Analysis
Price Action and Moving Averages
The stock has been hovering around $115.42, showing some recent strength after rebounding from lower levels earlier in the year. The 50-day moving average (blue line) is trending upward and is now crossing above the 200-day moving average (purple line). This type of crossover can sometimes signal a shift toward a more bullish trend, especially if sustained buying continues.
However, looking at the broader movement over the past year, the stock has struggled to hold onto momentum. There was a noticeable drop in late summer, followed by a choppy recovery that tested resistance near the 200-day moving average multiple times before finally moving above it in recent weeks.
Volume Trends
The volume bar chart indicates that trading activity has been somewhat inconsistent, with notable spikes at certain points—particularly during large price moves. Higher volume during upward price swings suggests some buying interest, but there hasn’t been a strong, sustained surge in volume to confirm a breakout.
Recent volume levels appear moderate, which could mean the stock is still in a transition phase. If volume picks up along with price, that could add more conviction to the current upward trend.
Relative Strength Index (RSI)
The RSI indicator at the bottom of the chart shows that the stock has recovered from previous oversold conditions. It’s currently in a more neutral range, meaning it’s neither overbought nor oversold. This suggests there may still be room for the stock to climb if momentum strengthens, but it isn’t necessarily in an extreme position that would indicate an imminent pullback.
Support and Resistance Levels
Looking at price history, the $100 level acted as a strong support area where the stock rebounded multiple times. On the upside, $120 to $125 has been a zone where the stock faced selling pressure in previous months. If the stock continues its current trajectory, it may test these resistance levels again.
Recent Candlestick Behavior
The last five trading sessions show some mixed signals. The wicks on the daily candles suggest both buying and selling pressure, with no definitive control from either bulls or bears. The longer lower wicks on some recent candles indicate buyers stepping in at lower prices, which can be a positive sign for support. However, the inability to push significantly higher suggests hesitation among investors.
If the stock can hold above the 200-day moving average and push past recent highs with increased volume, it may indicate further strength ahead. Conversely, if it struggles at current levels and dips below key moving averages again, it could signal a period of consolidation or a potential retest of lower support levels.
Analyst Ratings
📊 The consensus among analysts is a “Strong Buy” rating, indicating optimism about the company’s prospects.
🎯 The average price target for FCFS stands at $140.00, suggesting a potential upside from its current trading levels.
📈 Price targets among analysts range from a low of $130.00 to a high of $150.00, highlighting varying degrees of bullishness.
✅ Analysts who have upgraded FCFS often cite the company’s robust financial performance and growth potential. Factors such as strong revenue growth, effective management strategies, and expansion into new markets have contributed to a positive outlook. These upgrades reflect confidence in FirstCash’s ability to capitalize on favorable market conditions and deliver value to shareholders.
⚠️ On the other hand, some analysts have downgraded the stock, expressing concerns over potential regulatory challenges, fluctuations in commodity prices affecting pawn operations, and macroeconomic uncertainties that could impact consumer demand. These factors have prompted a reevaluation of the company’s near-term prospects, resulting in more conservative ratings.
💡 It’s important to note that analyst opinions are influenced by various factors, including recent financial results, industry trends, and broader economic indicators. Investors should consider these perspectives alongside their own research and risk tolerance when evaluating FCFS as a potential investment.
Earnings Report Summary
FirstCash Holdings, Inc. wrapped up its most recent quarter on a strong note, delivering solid growth across its key business segments. The company’s latest earnings report shows that demand for pawn services remains strong, and expansion efforts continue to pay off.
Financial Performance
Revenue came in at $883.81 million for the quarter, up 3.7% from the same period last year. Net income saw an even bigger jump, climbing 20.1% to $83.55 million. Earnings per share landed at $1.86, an improvement over the $1.53 reported in the prior-year quarter.
Looking at the full year, total revenue reached $3.4 billion, marking an 8% increase. That growth was fueled by strong performance in pawn operations, with same-store pawn receivables up 12% in both the U.S. and Latin America. Net income hit a record $259 million, pushing diluted earnings per share up by 19%.
Operational Highlights
The U.S. pawn segment stood out, posting a 14% increase in pre-tax operating income. The segment’s operating margin remained solid at 26%, and pawn loan fees rose 11% for the quarter and 16% for the full year. Retail sales were also strong, up 10% in the fourth quarter and 13% for the year.
Latin America’s pawn operations also delivered steady growth, with pre-tax income rising 7% on a constant currency basis. Margins held at 20%, and pawn loan fees climbed 10%. Retail sales in the region remained healthy, with margins stable at 34%.
Expanding Footprint
FirstCash continued to expand its presence, adding 99 new pawn stores throughout the year. That brings the total count to 3,026 locations, including 1,200 in the U.S. and 1,826 across Latin America. The company’s ongoing expansion shows its confidence in the demand for pawn lending and secondhand retail.
Dividend Update
In light of its strong performance, the company’s board declared a quarterly dividend of $0.38 per share, payable on February 28, 2025. This keeps FirstCash on track with its commitment to returning value to shareholders.
With consistent revenue growth, strong profitability, and continued expansion, FirstCash Holdings is proving it can navigate shifting economic conditions while maintaining solid financial results.
Financial Health and Stability
A strong dividend depends on a company’s financial health, and FirstCash has a mix of strengths and risks. On the positive side, it has $175.1 million in cash and a current ratio of 4.14, meaning it has ample liquidity to cover its short-term obligations.
However, its total debt stands at $2.05 billion, leading to a high debt-to-equity ratio of 99.8%. While this leverage is expected in a business that relies on lending, it’s something investors should keep an eye on.
Despite the debt, profitability remains solid. The company’s operating margin sits at 15.51%, and it generates a return on equity of 12.78%. Revenue continues to grow, with a 3.7% year-over-year increase, while earnings jumped 20.1% over the same period. These numbers suggest that the business is not only stable but expanding, further reinforcing dividend safety.
Valuation and Stock Performance
FirstCash is trading at 20.14 times trailing earnings and 15.36 times forward earnings, which places it in a reasonable valuation range. Its price-to-book ratio of 2.52 reflects investor confidence in the company’s ability to generate steady returns.
The stock has moved between $100.24 and $133.64 over the past year, with the current price at $115.42. Given that the 50-day and 200-day moving averages are $110.93 and $111.12, respectively, the stock appears to be trading near its fair value.
For long-term investors, the valuation looks fair, especially considering FirstCash’s strong cash flow and steady earnings growth.
Risks and Considerations
While FirstCash is a stable company with a reliable dividend, there are risks to consider.
🔸 Regulatory Risks – The pawn industry operates under government oversight, and regulatory changes could impact profitability.
🔸 Shifts in Consumer Demand – A strong economy may reduce the demand for pawn loans, potentially slowing revenue growth.
🔸 High Debt Levels – The company carries significant debt, which could become a concern if interest rates remain elevated.
🔸 Dividend Growth Uncertainty – While the dividend is stable, investors looking for rapid increases may not find it here.
Final Thoughts
FirstCash Holdings isn’t a high-yield dividend stock, but it offers a steady and reliable income stream backed by strong fundamentals. The low payout ratio, healthy cash flow, and consistent earnings growth make it an appealing option for investors who prioritize stability over high yields.
With a business model that tends to hold up well in different economic conditions, FirstCash is well-positioned to continue rewarding shareholders. While there are risks, particularly around debt levels and regulatory changes, the overall outlook remains positive for long-term dividend investors looking for dependable income with potential for moderate growth.
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