Financial Analysis: Navient Corporation (NAVI) and LendingTree (TREE)
Navient Corporation (NASDAQ: NAVI) and LendingTree (NASDAQ:TREE) are both mid-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, profitability, risk and earnings.
This table compares Navient Corporation and LendingTree’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
93.0% of Navient Corporation shares are held by institutional investors. Comparatively, 71.7% of LendingTree shares are held by institutional investors. 1.7% of Navient Corporation shares are held by insiders. Comparatively, 21.9% of LendingTree shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Earnings & Valuation
This table compares Navient Corporation and LendingTree’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Navient Corporation||$1.91 billion||1.69||$520.79 million||$1.90||6.21|
|LendingTree||$480.69 million||6.24||$73.26 million||$2.14||116.92|
Navient Corporation has higher revenue and earnings than LendingTree. Navient Corporation is trading at a lower price-to-earnings ratio than LendingTree, indicating that it is currently the more affordable of the two stocks.
Navient Corporation pays an annual dividend of $0.64 per share and has a dividend yield of 5.4%. LendingTree does not pay a dividend. Navient Corporation pays out 33.7% of its earnings in the form of a dividend.
This is a summary of recent ratings and target prices for Navient Corporation and LendingTree, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Navient Corporation currently has a consensus price target of $18.30, indicating a potential upside of 55.08%. LendingTree has a consensus price target of $203.70, indicating a potential downside of 18.59%. Given Navient Corporation’s higher possible upside, analysts plainly believe Navient Corporation is more favorable than LendingTree.
Volatility and Risk
Navient Corporation has a beta of 2.48, meaning that its share price is 148% more volatile than the S&P 500. Comparatively, LendingTree has a beta of 1.56, meaning that its share price is 56% more volatile than the S&P 500.
LendingTree beats Navient Corporation on 9 of the 16 factors compared between the two stocks.
About Navient Corporation
Navient Corporation provides asset management and business processing services to education, healthcare and government clients at the federal, state and local levels. The Company holds the portfolio of education loans insured or federally guaranteed under the Federal Family Education Loan Program (FFELP). It operates through four segments: FFELP Loans, Private Education Loans, Business Services and Other. It also holds the portfolio of Private Education Loans. It services its own portfolio of education loans, as well as education loans owned by the United States Department of Education (ED), financial institutions and nonprofit education lenders. It also provides business processing services to education-related clients, such as guaranty agencies and colleges and universities. It provides additional business processing services to a range of other clients, including federal agencies, state and local governments, healthcare systems and other healthcare providers and municipalities.
LendingTree, Inc. (LendingTree) is engaged in operating an online loan marketplace for consumers seeking loans and other credit-based offerings. The Company’s online marketplace provides consumers with access to product offerings from various lenders, which it refers to as Network Lenders, including mortgage loans, home equity loans and lines of credit, reverse mortgage loans, auto loans, credit cards, personal loans, student loans, small business loans and other related offerings. In addition, the Company offers tools and resources, including free credit scores that facilitate comparison shopping for these loans and other credit-based offerings. The Company offers its products in categories, including mortgage products and non-mortgage products. Its mortgage products category includes its purchase and refinance products. Its non-mortgage products include lending products and other products.
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