Critical Survey: Navient (NAVI) and Its Competitors

Navient (NASDAQ:NAVI) is one of 120 publicly-traded companies in the “Consumer Finance” industry, but how does it compare to its competitors? We will compare Navient to similar companies based on the strength of its dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.

Institutional & Insider Ownership

97.1% of Navient shares are held by institutional investors. Comparatively, 45.8% of shares of all “Consumer Finance” companies are held by institutional investors. 33.8% of Navient shares are held by insiders. Comparatively, 22.0% of shares of all “Consumer Finance” companies 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.

Dividends

Navient pays an annual dividend of $0.64 per share and has a dividend yield of 7.6%. Navient pays out -128.0% of its earnings in the form of a dividend. As a group, “Consumer Finance” companies pay a dividend yield of 6.1% and pay out 34.2% of their earnings in the form of a dividend. Navient is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Risk and Volatility

Navient has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, Navient’s competitors have a beta of 1.26, meaning that their average share price is 26% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Navient and its competitors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Navient	4	3	0	1	1.75
Navient Competitors	891	3351	5292	274	2.50

Navient presently has a consensus target price of $8.00, suggesting a potential downside of 4.99%. As a group, “Consumer Finance” companies have a potential upside of 21.19%. Given Navient’s competitors stronger consensus rating and higher possible upside, analysts clearly believe Navient has less favorable growth aspects than its competitors.

Profitability

This table compares Navient and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Navient	-1.64%	4.68%	0.23%
Navient Competitors	9.92%	-15.65%	2.14%

Valuation & Earnings

This table compares Navient and its competitors revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Navient	$3.20 billion	-$80.00 million	-16.84
Navient Competitors	$3.61 billion	$385.17 million	5.79

Navient’s competitors have higher revenue and earnings than Navient. Navient is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Summary

Navient competitors beat Navient on 8 of the 15 factors compared.

Navient Company Profile

Navient Corporation provides technology-enabled education finance and business processing solutions for education, health care, and government clients in the United States. It operates through three segments: Federal Education Loans, Consumer Lending, and Business Processing. The company owns Federal Family Education Loan Program (FFELP) loans that are insured or guaranteed by state or not-for-profit agencies; and performs servicing on its portfolios, as well as federal education loans held by other institutions. It also owns, originates, and services refinance and in-school private education loans; and offers business processing solutions, such as omnichannel contact center, workflow processing, and revenue cycle optimization services to federal agencies, state governments, tolling and parking authorities, other public sector clients, as well as hospitals, hospital systems, medical centers, large physician groups, other healthcare providers, and public health departments. In addition, the company provides corporate liquidity portfolio services. Navient Corporation was founded in 1973 and is headquartered in Herndon, Virginia.