FirstCash (FCFS) vs. Navient Corporation (NAVI) Financial Analysis

FirstCash (NASDAQ: FCFS) and Navient Corporation (NASDAQ:NAVI) are both mid-cap financials companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, profitability, risk, analyst recommendations, valuation, earnings and institutional ownership.

Valuation and Earnings

This table compares FirstCash and Navient Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
FirstCash $1.59 billion 1.80 $249.94 million $1.97 30.46
Navient Corporation $1.91 billion 1.95 $520.79 million $1.90 7.16

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

Insider and Institutional Ownership

96.4% of Navient Corporation shares are owned by institutional investors. 1.7% of Navient Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

FirstCash has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500. Comparatively, Navient Corporation has a beta of 2.43, indicating that its share price is 143% more volatile than the S&P 500.

Profitability

This table compares FirstCash and Navient Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FirstCash 7.29% 8.92% 6.25%
Navient Corporation 11.50% 14.05% 0.43%

Analyst Ratings

This is a breakdown of current ratings for FirstCash and Navient Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FirstCash 0 3 4 0 2.57
Navient Corporation 0 6 3 0 2.33

FirstCash currently has a consensus price target of $58.17, suggesting a potential downside of 3.06%. Navient Corporation has a consensus price target of $18.83, suggesting a potential upside of 38.48%. Given Navient Corporation’s higher probable upside, analysts plainly believe Navient Corporation is more favorable than FirstCash.

Dividends

FirstCash pays an annual dividend of $0.50 per share and has a dividend yield of 0.8%. Navient Corporation pays an annual dividend of $0.64 per share and has a dividend yield of 4.7%. FirstCash pays out 25.4% of its earnings in the form of a dividend. Navient Corporation pays out 33.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Summary

Navient Corporation beats FirstCash on 10 of the 16 factors compared between the two stocks.

FirstCash Company Profile

FirstCash, Inc., formerly First Cash Financial Services, Inc., is an operator of retail-based pawn stores in the United States and Latin America. The Company’s primary business is the operation of full-service pawn stores, which make small pawn loans secured by personal property, such as consumer electronics, jewelry, power tools, household appliances, sporting goods and musical instruments. The Company’s operates through two segments: the U.S. operations segment and the Latin America operations segment. The U.S. operations segment consists of all pawn and consumer loan operations in the United States and the Latin America operations segment consists of all pawn and consumer loan operations in Latin America, which includes operations in Mexico, Guatemala and El Salvador. In addition, some of the Company’s pawn stores offer small unsecured consumer loans or credit services products. The Company also operates consumer finance stores in Texas and Mexico.

Navient Corporation Company Profile

Navient Corporation provides asset management and business processing services to education, healthcare and government clients at the federal, state and local levels. The Company holds the portfolio of education loans insured or federally guaranteed under the Federal Family Education Loan Program (FFELP). It operates through four segments: FFELP Loans, Private Education Loans, Business Services and Other. It also holds the portfolio of Private Education Loans. It services its own portfolio of education loans, as well as education loans owned by the United States Department of Education (ED), financial institutions and nonprofit education lenders. It also provides business processing services to education-related clients, such as guaranty agencies and colleges and universities. It provides additional business processing services to a range of other clients, including federal agencies, state and local governments, healthcare systems and other healthcare providers and municipalities.

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