SLM Corporation (NASDAQ: SLM) and Santander Consumer USA Holdings (NYSE:SC) are both mid-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, dividends, profitability, analyst recommendations, valuation, risk and institutional ownership.

Insider & Institutional Ownership

97.5% of SLM Corporation shares are owned by institutional investors. Comparatively, 91.5% of Santander Consumer USA Holdings shares are owned by institutional investors. 0.6% of SLM Corporation shares are owned by insiders. Comparatively, 0.4% of Santander Consumer USA Holdings shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

SLM Corporation has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, Santander Consumer USA Holdings has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500.

Profitability

This table compares SLM Corporation and Santander Consumer USA Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SLM Corporation 22.95% 16.63% 1.62%
Santander Consumer USA Holdings 10.17% 11.33% 1.62%

Earnings & Valuation

This table compares SLM Corporation and Santander Consumer USA Holdings’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
SLM Corporation $1.15 billion 3.71 $250.32 million $0.67 14.69
Santander Consumer USA Holdings $6.53 billion 0.88 $766.46 million $1.86 8.56

Santander Consumer USA Holdings has higher revenue and earnings than SLM Corporation. Santander Consumer USA Holdings is trading at a lower price-to-earnings ratio than SLM Corporation, indicating that it is currently the more affordable of the two stocks.

Dividends

Santander Consumer USA Holdings pays an annual dividend of $0.12 per share and has a dividend yield of 0.8%. SLM Corporation does not pay a dividend. Santander Consumer USA Holdings pays out 6.5% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent recommendations and price targets for SLM Corporation and Santander Consumer USA Holdings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SLM Corporation 1 1 6 0 2.63
Santander Consumer USA Holdings 0 5 7 0 2.58

SLM Corporation currently has a consensus price target of $13.50, indicating a potential upside of 37.20%. Santander Consumer USA Holdings has a consensus price target of $16.75, indicating a potential upside of 5.15%. Given SLM Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe SLM Corporation is more favorable than Santander Consumer USA Holdings.

Summary

SLM Corporation beats Santander Consumer USA Holdings on 9 of the 14 factors compared between the two stocks.

About SLM Corporation

SLM Corporation (Sallie Mae) is the nation’s saving, planning, and paying for college company. Sallie Mae offers products, which promote personal finance including private education loans, Upromise rewards, scholarship search, college financial planning tools, insurance, and online retail banking.

About Santander Consumer USA Holdings

Santander Consumer USA Holdings Inc. is the holding company for Santander Consumer USA Inc., and subsidiaries, a consumer finance company focused on vehicle finance and third party servicing. The Company operates through Consumer Finance segment. Its Consumer Finance business is focused on vehicle financial products and services, including retail installment contracts, vehicle leases, and dealer loans, as well as financial products and services related to motorcycles, recreational vehicles (RVs), and marine vehicles. It also includes its personal loan and point-of-sale financing operations. The Company’s primary business is the indirect origination and securitization of retail installment contracts, principally through manufacturer-franchised dealers in connection with their sale of new and used vehicles to retail consumers. The Company offers auto financing products and services to Fiat Chrysler Automobiles US LLC (FCA) customers and dealers under the Chrysler Capital brand.

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