Financial Analysis: Cash America International (NYSE:CSH) & Navient Corp (NAVI)

Navient Corp (NASDAQ: NAVI) and Cash America International (NYSE:CSH) are both financials companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, dividends, risk, valuation, profitability, analyst recommendations and institutional ownership.

Risk and Volatility

Navient Corp has a beta of 2.44, meaning that its stock price is 144% more volatile than the S&P 500. Comparatively, Cash America International has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500.

Valuation & Earnings

This table compares Navient Corp and Cash America International’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Navient Corp $1.91 billion 2.13 $520.79 million $1.90 7.80
Cash America International N/A N/A N/A $1.18 35.76

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

Insider & Institutional Ownership

93.0% of Navient Corp shares are held by institutional investors. 1.7% of Navient Corp shares are held 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.

Dividends

Navient Corp pays an annual dividend of $0.64 per share and has a dividend yield of 4.3%. Cash America International pays an annual dividend of $0.32 per share and has a dividend yield of 0.8%. Navient Corp pays out 33.7% of its earnings in the form of a dividend. Cash America International pays out 27.1% 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. Navient Corp has raised its dividend for 2 consecutive years. Navient Corp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Navient Corp and Cash America International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Navient Corp 0 5 5 0 2.50
Cash America International 0 0 1 0 3.00

Navient Corp presently has a consensus target price of $18.45, indicating a potential upside of 24.54%. Cash America International has a consensus target price of $57.00, indicating a potential upside of 35.07%. Given Cash America International’s stronger consensus rating and higher probable upside, analysts clearly believe Cash America International is more favorable than Navient Corp.

Profitability

This table compares Navient Corp and Cash America International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Navient Corp 31.91% 12.50% 0.38%
Cash America International 0.87% 0.86% 0.64%

Summary

Navient Corp beats Cash America International on 10 of the 14 factors compared between the two stocks.

Navient Corp 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.

Cash America International Company Profile

Cash America International, Inc. provides specialty financial services to individuals through its storefront lending and franchised check cashing locations. The Company offers secured non-recourse loans, referred to as pawn loans, as its primary line of business. The Company is also engaged in originating, arranging, guaranteeing or purchasing consumer loans in some of its locations. The Company also offers check cashing and other ancillary products and services, including money orders, wire transfers and auto insurance. The Company’s franchised check cashing business offers check cashing services through its franchised check cashing centers. The Company provides its services in the United States under the names Cash America Pawn, SuperPawn, Cash America Payday Advance, Cashland and Mr. Payroll. The Company is engaged in pawn lending activities, merchandise disposition activities, consumer loan activities and check cashing and other financial services.

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