Know What You Own
We own Equifax across all three Jensen Quality Strategies due to its attractive long-term growth prospects and sustainable competitive advantages. Growth drivers include new product development, expansion into new markets, and business productivity enhancements. The company’s primary competitive advantage is derived from high entry barriers associated with the ownership of unique data assets at scale. Industry dynamics are favorable, with the credit bureau industry a tri-party oligopoly and Equifax’s Workforce Solutions business bolstered by a vast first-mover advantage in employment records data compilation.
Pandemic Standout: 15 Years in the Making
Equifax’s resiliency since the inception of the pandemic can be traced back to a strategic investment made nearly 15 years ago that transformed EFX into the business it is today.
In 2007, Equifax expanded beyond its core credit bureau business by acquiring TALX, owner of “The Work Number” (TWN), a proprietary database of current and historic income and employment records. By 2020, EFX had grown the database to include over 136 million employment records that are regularly updated by over one million organizations.
Equifax’s Workforce Solutions segment was born through this acquisition and has since grown to become EFX’s largest, fastest growing and most profitable segment. EFX uses this vast TWN database to provide clients with income verification services. This business shined during the pandemic, as mortgage and non-mortgage verification services sales grew over +57% Y/Y in 2020. In addition, the company’s unemployment claims processing, a distinctly counter-cyclical business, sales grew +34% Y/Y in 2020.
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