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

Dividends

FirstCash pays an annual dividend of $0.80 per share and has a dividend yield of 1.1%. Navient pays an annual dividend of $0.64 per share and has a dividend yield of 4.7%. FirstCash pays out 34.2% of its earnings in the form of a dividend. Navient pays out 35.2% 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.

Earnings and Valuation

This table compares FirstCash and Navient’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
FirstCash $1.09 billion 3.06 $60.12 million $2.34 30.19
Navient $4.97 billion 0.73 $681.00 million $1.82 7.55

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

Volatility and Risk

FirstCash has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500. Comparatively, Navient has a beta of 2.33, meaning that its share price is 133% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
FirstCash 6.41% 8.45% 5.91%
Navient 10.88% 14.09% 0.43%

Institutional and Insider Ownership

95.7% of FirstCash shares are held by institutional investors. Comparatively, 92.4% of Navient shares are held by institutional investors. 2.8% of FirstCash shares are held by company insiders. Comparatively, 1.7% of Navient shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and price targets for FirstCash and Navient, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FirstCash 0 2 5 0 2.71
Navient 1 6 4 0 2.27

FirstCash currently has a consensus target price of $65.50, suggesting a potential downside of 7.29%. Navient has a consensus target price of $17.50, suggesting a potential upside of 27.27%. Given Navient’s higher possible upside, analysts clearly believe Navient is more favorable than FirstCash.

Summary

FirstCash beats Navient on 9 of the 16 factors compared between the two stocks.

About FirstCash

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.

About Navient

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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