Analyzing Nelnet (NYSE:NNI) and Dave (NASDAQ:DAVE)

Nelnet (NYSE:NNI) and Dave (NASDAQ:DAVE) are both mid-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, dividends, risk, profitability, institutional ownership, valuation and analyst recommendations.

Risk & Volatility

Nelnet has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500. Comparatively, Dave has a beta of 3.92, indicating that its share price is 292% more volatile than the S&P 500.

Profitability

This table compares Nelnet and Dave’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nelnet	14.35%	8.26%	2.11%
Dave	34.58%	77.46%	40.44%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Nelnet and Dave, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nelnet	1	2	0	0	1.67
Dave	0	3	14	0	2.82

Nelnet presently has a consensus target price of $125.00, suggesting a potential downside of 0.33%. Dave has a consensus target price of $433.25, suggesting a potential upside of 14.99%. Given Dave’s stronger consensus rating and higher probable upside, analysts clearly believe Dave is more favorable than Nelnet.

Valuation and Earnings

This table compares Nelnet and Dave”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nelnet	$1.44 billion	3.12	$428.47 million	$8.36	15.00
Dave	$554.20 million	8.67	$195.87 million	$15.42	24.43

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

Institutional & Insider Ownership

33.5% of Nelnet shares are owned by institutional investors. Comparatively, 18.0% of Dave shares are owned by institutional investors. 40.3% of Nelnet shares are owned by company insiders. Comparatively, 23.6% of Dave shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Dave beats Nelnet on 10 of the 14 factors compared between the two stocks.

About Nelnet

Nelnet, Inc. engages in loan servicing, communications, education technology, services, and payment processing businesses worldwide. The Loan Servicing and Systems segment provides loan conversion, application processing, borrower updates, customer service, payment processing, due diligence procedures, funds management reconciliation, and claim processing services. This segment also offers student loan servicing software; business process outsourcing services specialized in contact center management, such as inbound calls, outreach campaigns and sales, and interacting with customers through multi-channels, and processing and technology services. The Education Technology Services and Payments segment provides financial management services; school information system software; website design and cost-effective admissions software; FACTS Giving, a donation platform; and customized professional development and coaching services, educational instruction services, and technology products that aid in teacher and student evaluations. This segment also offers tuition payment plans, and service and technology for student billings, payments, and refunds; solutions for in-person, online, and mobile payment experiences on campus; payment processing services, such as credit card and electronic transfer; faith community, giving, and learning management services and technologies; and an integrated commerce payment platform, financial management, and tuition payment plan services, as well as a school management platform that provides administrative, information and financial management, and communication functions for K-12 schools. The Asset Generation and Management segment acquires, manages, and owns loan assets. The Nelnet Bank segment operates as an internet industrial bank. It also offers investment advisory, insurance, and reinsurance services, as well as engages in real estate investment business. The company was incorporated in 1977 and is headquartered in Lincoln, Nebraska.

About Dave

Dave, Inc. is a digital banking service. Its products include a budgeting tool to help members manage their upcoming bills to avoid overspending, cash advances through its flagship ExtraCash product to help members avoid punitive overdraft fees, a Side Hustle product, where Dave helps connect members with supplemental work opportunities, and Dave Banking, a modern checking account experience with valuable tools for building long-term financial health. The company was founded by Jason Wilk, Paras Chitrakar, and John Wolanin in October 2015 and is headquartered in Los Angeles, CA.