Contrasting Bread Financial (NYSE:BFH) and SLM (NASDAQ:SLMBP)

Bread Financial (NYSE:BFH) and SLM (NASDAQ:SLMBP) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, institutional ownership, risk, analyst recommendations and profitability.

Dividends

Bread Financial pays an annual dividend of $0.92 per share and has a dividend yield of 0.8%. SLM pays an annual dividend of $7.37 per share and has a dividend yield of 9.8%. Bread Financial pays out 7.2% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Bread Financial and SLM, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bread Financial	1	6	8	0	2.47
SLM	0	1	2	0	2.67

Bread Financial currently has a consensus price target of $110.58, suggesting a potential downside of 1.55%. SLM has a consensus price target of $40.00, suggesting a potential downside of 46.73%. Given Bread Financial’s higher probable upside, analysts plainly believe Bread Financial is more favorable than SLM.

Profitability

This table compares Bread Financial and SLM’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bread Financial	11.95%	18.42%	2.76%
SLM	N/A	N/A	N/A

Insider & Institutional Ownership

99.5% of Bread Financial shares are held by institutional investors. 1.3% of Bread Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Bread Financial and SLM”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bread Financial	$4.70 billion	0.92	$518.00 million	$12.82	8.76
SLM	$1.96 billion	N/A	N/A	N/A	N/A

Bread Financial has higher revenue and earnings than SLM.

Summary

Bread Financial beats SLM on 8 of the 11 factors compared between the two stocks.

About Bread Financial

Bread Financial Holdings, Inc. provides tech-forward payment and lending solutions to customers and consumer-based industries in North America. It offers credit card and other loans financing services, including risk management solutions, account origination, and funding services for private label and co-brand credit card programs, as well as through Bread partnerships; and Comenity-branded general purpose cash-back credit. The company also manages and services the loans it originates for private label, co-brand, and general-purpose credit card programs, and installment loans and split-pay products; and provides marketing, and data and analytics services. In addition, it offers an enhanced digital suite that includes a unified software development kit, which provides access to its suite of products, as well as promotes credit payment options earlier in the shopping experience. Further, the company through Bread, a digital payments platform and robust suite of application programming interfaces allows merchants and partners to integrate online point-of-sale financing and other digital payment products. It offers its products under the Bread CashbackTM, Bread PayTM, and Bread SavingsTM brands. The company was formerly known as Alliance Data Systems Corporation and changed its name to Bread Financial Holdings, Inc. in March 2022. Bread Financial Holdings, Inc. was incorporated in 1995 and is headquartered in Columbus, Ohio.

About SLM

SLM Corporation, through its subsidiaries, originates and services private education loans to students and their families to finance the cost of their education in the United States. It is also involved in the provision of retail deposit accounts, including certificates of deposit, money market accounts, and high-yield savings accounts; and interest-bearing omnibus accounts. The company was formerly known as New BLC Corporation and changed its name to SLM Corporation in December 2013. SLM Corporation was founded in 1972 and is headquartered in Newark, Delaware.