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

Volatility & Risk

SLM has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, Santander Consumer USA has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for SLM and Santander Consumer USA, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SLM 1 1 6 0 2.63
Santander Consumer USA 0 5 9 0 2.64

SLM currently has a consensus price target of $13.50, suggesting a potential upside of 18.94%. Santander Consumer USA has a consensus price target of $17.36, suggesting a potential downside of 4.58%. Given SLM’s higher probable upside, equities analysts plainly believe SLM is more favorable than Santander Consumer USA.

Dividends

Santander Consumer USA pays an annual dividend of $0.12 per share and has a dividend yield of 0.7%. SLM does not pay a dividend. Santander Consumer USA pays out 6.5% of its earnings in the form of a dividend.

Profitability

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

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

Insider and Institutional Ownership

99.3% of SLM shares are held by institutional investors. Comparatively, 91.4% of Santander Consumer USA shares are held by institutional investors. 0.6% of SLM shares are held by insiders. Comparatively, 0.4% of Santander Consumer USA shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares SLM and Santander Consumer USA’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SLM $1.15 billion 4.28 $250.32 million $0.67 16.94
Santander Consumer USA $6.53 billion 1.00 $766.46 million $1.86 9.78

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

Summary

SLM beats Santander Consumer USA on 8 of the 15 factors compared between the two stocks.

SLM Company Profile

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.

Santander Consumer USA Company Profile

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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