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

Risk & Volatility

SLM has a beta of 1.3, suggesting that its stock price is 30% more volatile than the S&P 500. Comparatively, Santander Consumer USA has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500.

Institutional and Insider Ownership

99.4% 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 large money managers, endowments and hedge funds believe a company is poised for long-term growth.

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%

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SLM $1.15 billion 4.36 $250.32 million $0.67 17.27
Santander Consumer USA $6.53 billion 0.96 $766.46 million $1.86 9.37

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.

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.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for SLM and Santander Consumer USA, as provided by MarketBeat.

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

SLM currently has a consensus target price of $13.50, suggesting a potential upside of 16.68%. Santander Consumer USA has a consensus target price of $16.75, suggesting a potential downside of 3.87%. Given SLM’s stronger consensus rating and higher probable upside, equities analysts clearly believe SLM is more favorable than Santander Consumer USA.

Summary

SLM beats Santander Consumer USA on 9 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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