Santander Consumer USA Holdings (NYSE: SC) and SLM Corporation (NASDAQ:SLM) are both mid-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, dividends and valuation.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Santander Consumer USA Holdings and SLM Corporation, as provided by MarketBeat.

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

Santander Consumer USA Holdings currently has a consensus price target of $16.75, suggesting a potential upside of 2.63%. SLM Corporation has a consensus price target of $13.50, suggesting a potential upside of 30.69%. Given SLM Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe SLM Corporation is more favorable than Santander Consumer USA Holdings.

Profitability

This table compares Santander Consumer USA Holdings and SLM Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Santander Consumer USA Holdings 10.17% 11.33% 1.62%
SLM Corporation 22.95% 16.63% 1.62%

Dividends

Santander Consumer USA Holdings pays an annual dividend of $0.12 per share and has a dividend yield of 0.7%. SLM Corporation does not pay a dividend. Santander Consumer USA Holdings pays out 6.5% of its earnings in the form of a dividend.

Risk and Volatility

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

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Santander Consumer USA Holdings $6.53 billion 0.90 $766.46 million $1.86 8.77
SLM Corporation $1.15 billion 3.89 $250.32 million $0.67 15.42

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

Insider and Institutional Ownership

91.5% of Santander Consumer USA Holdings shares are owned by institutional investors. Comparatively, 97.5% of SLM Corporation shares are owned by institutional investors. 0.4% of Santander Consumer USA Holdings shares are owned by company insiders. Comparatively, 0.6% of SLM Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

SLM Corporation beats Santander Consumer USA Holdings on 9 of the 14 factors compared between the two stocks.

Santander Consumer USA Holdings 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.

SLM Corporation 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.

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