LendingClub Corporation (NYSE: LC) and Navient Corporation (NASDAQ:NAVI) are both mid-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitabiliy, institutional ownership and valuation.
Risk & Volatility
LendingClub Corporation has a beta of 1.89, suggesting that its stock price is 89% more volatile than the S&P 500. Comparatively, Navient Corporation has a beta of 2.48, suggesting that its stock price is 148% more volatile than the S&P 500.
Dividends
Navient Corporation pays an annual dividend of $0.64 per share and has a dividend yield of 4.4%. LendingClub Corporation does not pay a dividend. Navient Corporation pays out 33.7% of its earnings in the form of a dividend.
Profitability
This table compares LendingClub Corporation and Navient Corporation’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| LendingClub Corporation | -38.40% | -14.31% | -2.54% |
| Navient Corporation | 11.50% | 14.05% | 0.43% |
Analyst Ratings
This is a summary of recent ratings and target prices for LendingClub Corporation and Navient Corporation, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| LendingClub Corporation | 0 | 11 | 5 | 0 | 2.31 |
| Navient Corporation | 0 | 6 | 3 | 0 | 2.33 |
LendingClub Corporation currently has a consensus target price of $6.52, indicating a potential upside of 25.58%. Navient Corporation has a consensus target price of $18.83, indicating a potential upside of 29.08%. Given Navient Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Navient Corporation is more favorable than LendingClub Corporation.
Earnings & Valuation
This table compares LendingClub Corporation and Navient Corporation’s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| LendingClub Corporation | $474.25 million | 4.42 | -$181.74 million | ($0.45) | -11.53 |
| Navient Corporation | $1.91 billion | 2.13 | $529.62 million | $1.90 | 7.68 |
Navient Corporation has higher revenue and earnings than LendingClub Corporation. LendingClub Corporation is trading at a lower price-to-earnings ratio than Navient Corporation, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
91.5% of LendingClub Corporation shares are held by institutional investors. Comparatively, 94.3% of Navient Corporation shares are held by institutional investors. 11.4% of LendingClub Corporation shares are held by insiders. Comparatively, 1.7% of Navient Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Summary
Navient Corporation beats LendingClub Corporation on 11 of the 15 factors compared between the two stocks.
About LendingClub Corporation
LendingClub Corporation provides online marketplace to connect borrowers and investors. Consumers and small business owners borrow through Lending Club. Investors use Lending Club to earn risk-adjusted returns from an asset class that has been closed to many investors and only available on a limited basis to large institutional investors. Its technology automates aspects of operations, including the borrower application process, data gathering, credit decisioning and scoring, loan funding, investing and servicing, regulatory compliance and fraud detection. Its platform offers analytical tools and data to enable investors to make decisions and assess their portfolios. Its technology platform has allowed it to expand its offerings from personal loans to include small business loans, and to expand investor classes from individuals to institutions and create various investment vehicles.
About Navient Corporation
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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