Higher One Holdings (NYSE: ONE) and Nelnet (NYSE:NNI) are both industrials companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, valuation, institutional ownership and risk.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Higher One Holdings and Nelnet, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Higher One Holdings 0 0 0 0 N/A
Nelnet 0 1 1 0 2.50

Nelnet has a consensus price target of $53.50, suggesting a potential downside of 8.06%.

Profitability

This table compares Higher One Holdings and Nelnet’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Higher One Holdings -26.77% -16.36% -10.01%
Nelnet 20.19% 9.65% 0.75%

Insider and Institutional Ownership

40.4% of Nelnet shares are held by institutional investors. 45.4% of Nelnet shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Higher One Holdings and Nelnet’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Higher One Holdings N/A N/A N/A $0.16 N/A
Nelnet $1,242.01 1.95 $256.75 $6.16 9.45

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

Risk & Volatility

Higher One Holdings has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500. Comparatively, Nelnet has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500.

Dividends

Nelnet pays an annual dividend of $0.56 per share and has a dividend yield of 1.0%. Higher One Holdings does not pay a dividend. Nelnet pays out 9.1% of its earnings in the form of a dividend.

Summary

Nelnet beats Higher One Holdings on 9 of the 11 factors compared between the two stocks.

About Higher One Holdings

Higher One Holdings, Inc. is a provider of technology-based payment processing and refund disbursement services to higher education institutions and their students. The Company also provides campus communities with student-oriented banking services, which include user-friendly features, through its bank partners. The Company operates through two segments: Disbursements and Payments. The Disbursements segment includes its Refund Management disbursement service, which is offered to higher education institution clients, and the OneAccount, a Federal Deposit Insurance Corporation (FDIC)-insured online checking account that is offered to students, as well as faculty, staff and alumni. The Payments segment includes its CASHNet payment processing suite and its Campus Solutions suite, both of which enable higher education institutions to accept online payments, automate certain billing and processing functions, and offer tuition payment plans.

About Nelnet

Nelnet, Inc. focuses on delivering education-related products and services and student loan asset management. The Company is engaged in student loan servicing, tuition payment processing and school information systems, and communications. The Company’s segments include Loan Systems and Servicing, Tuition Payment Processing and Campus Commerce, Communications, Asset Generation and Management, and Corporate and Other Activities. The Company earns fee-based revenue through its Loan Systems and Servicing, Tuition Payment Processing, and Communications operating segments. In addition, the Company earns interest income on its student loan portfolio in its Asset Generation and Management operating segment. Corporate and Other Activities include real estate and other investments. The Company, through Allo Communications LLC, is engaged in the sale of advanced telecommunication services, including Internet, broadband, telephone, and television services.

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