We present a new on-line algorithm for computing the Lempel-Ziv factorization of a string that runs in O(N.log(N)) time and uses only O(N.log(s)) bits of working space, where N is the length of the string and s is the size of the alphabet. This is a notable improvement compared to the performance of previous on-line algorithms using the same order of working space but running in either O(N.log^3(N)) time [Okanohara and Sadakane, 2009] or O(N.log^2(N)) time [Starikovskaya, 2012]. The key to our new algorithm is in the utilization of an elegant but less popular index structure called Directed Acyclic Word Graphs, or DAWGs [Blumer et al., 1985]. We also present an opportunistic variant of our algorithm, which, given the run length encoding of ...