OneMain (NYSE: OMF) and Nelnet (NYSE:NNI) are both mid-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.
Volatility and Risk
OneMain has a beta of 2.74, indicating that its share price is 174% more volatile than the S&P 500. Comparatively, Nelnet has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500.
This table compares OneMain and Nelnet’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current recommendations and price targets for OneMain and Nelnet, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
OneMain presently has a consensus target price of $35.21, suggesting a potential upside of 17.77%. Nelnet has a consensus target price of $53.50, suggesting a potential upside of 0.02%. Given OneMain’s stronger consensus rating and higher probable upside, analysts plainly believe OneMain is more favorable than Nelnet.
Nelnet pays an annual dividend of $0.64 per share and has a dividend yield of 1.2%. OneMain does not pay a dividend. Nelnet has increased its dividend for 2 consecutive years.
Valuation and Earnings
This table compares OneMain and Nelnet’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|OneMain||$3.76 billion||1.08||$183.00 million||$3.54||8.45|
|Nelnet||$1.20 billion||1.82||$173.16 million||N/A||N/A|
OneMain has higher revenue and earnings than Nelnet.
Institutional and Insider Ownership
94.3% of OneMain shares are owned by institutional investors. Comparatively, 41.4% of Nelnet shares are owned by institutional investors. 43.9% of OneMain shares are owned by company insiders. Comparatively, 46.1% of Nelnet shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
OneMain beats Nelnet on 9 of the 15 factors compared between the two stocks.
OneMain Company Profile
OneMain Holdings, Inc., through its subsidiaries, provides consumer finance and insurance products and services. The company operates in two segments: Consumer and Insurance, and Acquisitions and Servicing. It provides secured and unsecured personal loans; credit insurance products, such as life, disability, and involuntary unemployment insurance products; non-credit insurance; and auto membership plans, as well as retail sales finance services. The company also services and holds real estate loans secured by first or second mortgages on residential real estate. As of December 31, 2017, it operated through a network of 1,600 branches in 44 states in the United States, as well as through onemainfinancial.com Website. The company was formerly known as Springleaf Holdings, Inc. and changed its name to OneMain Holdings, Inc. in November 2015. OneMain Holdings, Inc. was founded in 1920 and is based in Evansville, Indiana.
Nelnet Company Profile
Nelnet, Inc. provides education related products and services, and loan asset management services worldwide. The company's Loan Systems and Servicing segment is involved in loan servicing activities, such as loan conversion, application processing, borrower updates, customer service, payment processing, due diligence procedures, funds management reconciliation, and claim processing activities for student loan portfolio and third-party clients. This segment also provides software and data center, default aversion tracking, claim processing, and post-default collection services, as well as borrower and loan updates for guarantee agencies, and contact center solutions; and licenses student loan servicing software to third-party student loan holders and servicers. Its Tuition Payment Processing and Campus Commerce segment offers products and services to help students and families to manage the payment of education costs; school information system software; professional development and educational instruction services to K-12 schools; and education-focused technologies, services, and support solutions to schools for collecting and processing commerce data. It also provides electronic transfer and credit card processing, reporting, billing and invoicing, and integration services; and mobile and virtual terminal solutions for business software products. Its Communications segment provides Internet access, data connectivity, Internet protocol television video, video on demand, and high-definition television services; digital video recorders to residential and business subscribers; and local calling and long-distance telephone services. This segment offers its services through direct marketing, call and communication centers, and sales representatives; and its Website. Its Asset Generation and Management segment acquires, manages, and owns loan assets. It also provides investment advisory services. The company was founded in 1978 and is headquartered in Lincoln, Nebraska.
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