Analyzing Navient (NASDAQ:NAVI) & LendingTree (NASDAQ:TREE)

LendingTree (NASDAQ:TREE) and Navient (NASDAQ:NAVI) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Risk and Volatility

LendingTree has a beta of 1.99, indicating that its stock price is 99% more volatile than the S&P 500. Comparatively, Navient has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500.

Insider and Institutional Ownership

68.3% of LendingTree shares are owned by institutional investors. Comparatively, 97.1% of Navient shares are owned by institutional investors. 4.0% of LendingTree shares are owned by insiders. Comparatively, 33.8% of Navient shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares LendingTree and Navient’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LendingTree	7.60%	15.92%	5.40%
Navient	1.79%	3.65%	0.18%

Analyst Recommendations

This is a breakdown of current ratings for LendingTree and Navient, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LendingTree	0	2	4	0	2.67
Navient	4	4	0	0	1.50

LendingTree currently has a consensus target price of $53.60, indicating a potential upside of 49.76%. Navient has a consensus target price of $8.00, indicating a potential upside of 29.55%. Given LendingTree’s stronger consensus rating and higher probable upside, equities research analysts clearly believe LendingTree is more favorable than Navient.

Earnings and Valuation

This table compares LendingTree and Navient”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LendingTree	$1.12 billion	0.45	$151.31 million	$7.02	5.10
Navient	$3.20 billion	0.18	-$80.00 million	$0.53	11.65

LendingTree has higher earnings, but lower revenue than Navient. LendingTree is trading at a lower price-to-earnings ratio than Navient, indicating that it is currently the more affordable of the two stocks.

Summary

LendingTree beats Navient on 10 of the 14 factors compared between the two stocks.

About LendingTree

LendingTree, Inc. operates an online marketplace that connects consumers with financial institutions and other providers. Through its platform, users can compare offers and seek products such as mortgages, personal and auto loans, credit cards, insurance, and deposit accounts. Founded in 1996 by Doug Lebda, LendingTree helped bring loan comparison shopping online. The company serves consumers in the United States and also operates comparison and financial-information websites, including CompareCards and ValuePenguin.

About Navient

Navient is a U.S.-focused education finance company whose business has centered on managing student loan portfolios and providing loan servicing. Its services have included payment processing, borrower account support and repayment assistance for federal and private education loans, as well as asset-recovery and business-processing services. The company was formed in 2014 through the separation of SLM Corporation, commonly known as Sallie Mae. Navient later transferred federal student loan servicing operations to other providers, including a transfer to Maximus in 2021 and an agreement to move its remaining federal servicing accounts to MOHELA in 2024.