Contrasting World Acceptance Corporation (WRLD) & Navient Corporation (NAVI)
World Acceptance Corporation (NASDAQ: WRLD) and Navient Corporation (NASDAQ:NAVI) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, dividends, analyst recommendations and profitability.
This is a breakdown of current ratings for World Acceptance Corporation and Navient Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|World Acceptance Corporation||3||0||0||0||1.00|
World Acceptance Corporation currently has a consensus target price of $52.33, suggesting a potential downside of 36.86%. Navient Corporation has a consensus target price of $18.45, suggesting a potential upside of 22.84%. Given Navient Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Navient Corporation is more favorable than World Acceptance Corporation.
Valuation and Earnings
This table compares World Acceptance Corporation and Navient Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|World Acceptance Corporation||$533.56 million||1.35||$136.07 million||$7.98||10.39|
|Navient Corporation||$1.91 billion||2.16||$520.79 million||$1.90||7.91|
Navient Corporation has higher revenue and earnings than World Acceptance Corporation. Navient Corporation is trading at a lower price-to-earnings ratio than World Acceptance Corporation, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
World Acceptance Corporation has a beta of 2.34, suggesting that its stock price is 134% more volatile than the S&P 500. Comparatively, Navient Corporation has a beta of 2.44, suggesting that its stock price is 144% more volatile than the S&P 500.
This table compares World Acceptance Corporation and Navient Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|World Acceptance Corporation||13.13%||15.75%||8.48%|
Institutional and Insider Ownership
91.9% of World Acceptance Corporation shares are owned by institutional investors. Comparatively, 93.0% of Navient Corporation shares are owned by institutional investors. 27.3% of World Acceptance Corporation shares are owned by insiders. Comparatively, 1.7% of Navient Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Navient Corporation pays an annual dividend of $0.64 per share and has a dividend yield of 4.3%. World Acceptance Corporation does not pay a dividend. Navient Corporation pays out 33.7% of its earnings in the form of a dividend.
Navient Corporation beats World Acceptance Corporation on 9 of the 16 factors compared between the two stocks.
World Acceptance Corporation Company Profile
World Acceptance Corporation operates a small-loan consumer finance business in 15 states and Mexico as of March 31, 2016. The Company offers short-term small installment loans, medium-term larger installment loans, related credit insurance and ancillary products and services to individuals. The Company offers standardized installment loans generally between $300 and $4,000 through 1,339 branches in Alabama, Georgia, Idaho, Illinois, Indiana, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, South Carolina, Texas, Tennessee, Wisconsin and Mexico as of March 31, 2016. The Company generally serves individuals with limited access to other sources of consumer credit, such as banks, credit unions, other consumer finance businesses and credit card lenders. In the United States branches, the Company also offers income tax return preparation services to its loan customers and other individuals.
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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