Jefferies Financial Group (NYSE:JEF) and Navient (NASDAQ:NAVI) are both mid-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, institutional ownership, risk, dividends, analyst recommendations and profitability.
Jefferies Financial Group pays an annual dividend of $0.50 per share and has a dividend yield of 2.6%. Navient pays an annual dividend of $0.64 per share and has a dividend yield of 4.7%. Jefferies Financial Group pays out 61.7% of its earnings in the form of a dividend. Navient pays out 30.6% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.
76.0% of Jefferies Financial Group shares are owned by institutional investors. Comparatively, 94.1% of Navient shares are owned by institutional investors. 10.0% of Jefferies Financial Group shares are owned by insiders. Comparatively, 1.9% of Navient 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.
This table compares Jefferies Financial Group and Navient’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Jefferies Financial Group||N/A||N/A||N/A|
Earnings and Valuation
This table compares Jefferies Financial Group and Navient’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Jefferies Financial Group||$5.01 billion||1.14||$1.03 billion||$0.81||23.74|
|Navient||$5.61 billion||0.58||$395.00 million||$2.09||6.53|
Jefferies Financial Group has higher earnings, but lower revenue than Navient. Navient is trading at a lower price-to-earnings ratio than Jefferies Financial Group, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current recommendations for Jefferies Financial Group and Navient, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Jefferies Financial Group||0||0||1||0||3.00|
Jefferies Financial Group presently has a consensus target price of $29.50, indicating a potential upside of 53.41%. Navient has a consensus target price of $15.63, indicating a potential upside of 14.47%. Given Jefferies Financial Group’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Jefferies Financial Group is more favorable than Navient.
Volatility & Risk
Jefferies Financial Group has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500. Comparatively, Navient has a beta of 2.2, indicating that its share price is 120% more volatile than the S&P 500.
Navient beats Jefferies Financial Group on 10 of the 16 factors compared between the two stocks.
About Jefferies Financial Group
Jefferies Financial Group Inc., a financial services company, engages in investment banking and capital markets, asset management, and direct investing businesses in the Americas, Europe, and Asia. the company also offers equities research, sales, and trading services; equity finance services comprising financing, securities lending, and other prime brokerage services; and wealth management services to high net worth individuals, their families and businesses, private equity and venture funds, and small institutions. In addition, it provides fixed income sales and trading services for investment grade corporate bonds, U.S. and European government and agency securities, municipal bonds, mortgage- and asset-backed securities, leveraged loans, consumer loans, securities, markets debt, interest rate, and credit derivative products, as well as foreign exchange trade execution and securitization capabilities, as well as manages, invests in, and provides services to a group of alternative asset management platforms in investment strategies and asset classes. The company was formerly known as Leucadia National Corporation and changed its name to Jefferies Financial Group Inc. in May 2018. Jefferies Financial Group Inc. was founded in 1968 and is headquartered in New York, New York.
Navient Corporation provides education loan management and business processing solutions for education, healthcare, and government clients at the federal, state, and local levels in the United States. It operates in three segments: Federal Education Loans, Consumer Lending, and Business Processing. The company holds and acquires Federal Family Education Loan Program loans that are insured or guaranteed by state or not-for-profit agencies; and performs servicing and asset recovery services on its own loan portfolio, and federal education loans owned by the United States Department of Education and other institutions. It also holds, originates, and acquires consumer loans; and performs servicing activities on its own education loan portfolio, including primarily private education loans, and private education refinance loans. In addition, the company offers revenue cycle management and business processing services; and healthcare services that include revenue cycle outsourcing, accounts receivable management, extended business office support, and consulting engagement for federal, state, and municipal clients; public authorities; and healthcare organizations. Further, it provides customizable solutions for its clients that include non-profit/religious-affiliated hospital systems, teaching hospitals, urban medical centers, for-profit healthcare systems, critical access hospitals, children's hospitals, and various physician groups. The company was founded in 1973 and is headquartered in Wilmington, Delaware.
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