Head-To-Head Comparison: WisdomTree Investments (WETF) & Navient (NAVI)

WisdomTree Investments (NASDAQ: WETF) and Navient (NASDAQ:NAVI) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.

Institutional and Insider Ownership

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86.4% of WisdomTree Investments shares are held by institutional investors. Comparatively, 97.9% of Navient shares are held by institutional investors. 16.1% of WisdomTree Investments shares are held by insiders. Comparatively, 1.7% of Navient shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
WisdomTree Investments 11.46% 16.16% 13.16%
Navient 5.94% 13.90% 0.42%

Dividends

WisdomTree Investments pays an annual dividend of $0.12 per share and has a dividend yield of 1.2%. Navient pays an annual dividend of $0.64 per share and has a dividend yield of 4.8%. WisdomTree Investments pays out 50.0% of its earnings in the form of a dividend. Navient pays out 35.8% 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.

Earnings and Valuation

This table compares WisdomTree Investments and Navient’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
WisdomTree Investments $237.40 million 6.26 $27.19 million $0.24 40.42
Navient $5.18 billion 0.68 $292.00 million $1.79 7.39

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

Analyst Ratings

This is a summary of current recommendations and price targets for WisdomTree Investments and Navient, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
WisdomTree Investments 2 3 5 0 2.30
Navient 1 5 5 0 2.36

WisdomTree Investments currently has a consensus target price of $11.72, suggesting a potential upside of 20.85%. Navient has a consensus target price of $18.00, suggesting a potential upside of 36.05%. Given Navient’s stronger consensus rating and higher probable upside, analysts plainly believe Navient is more favorable than WisdomTree Investments.

Risk and Volatility

WisdomTree Investments has a beta of 2.67, suggesting that its stock price is 167% more volatile than the S&P 500. Comparatively, Navient has a beta of 2.2, suggesting that its stock price is 120% more volatile than the S&P 500.

Summary

Navient beats WisdomTree Investments on 8 of the 15 factors compared between the two stocks.

About WisdomTree Investments

WisdomTree Investments, Inc., through its subsidiaries, operates as an exchange-traded funds (ETFs) sponsor and asset manager. It offers ETFs in equities, currency, fixed income, and alternatives asset classes. The company also licenses its indexes to third parties for proprietary products, as well as offers a platform to promote the use of WisdomTree ETFs in 401(k) plans. It develops index using its fundamentally weighted index methodology. In addition, the company provides investment advisory services. The company was founded in 1985 and is based in New York, New York.

About Navient

Navient Corporation provides asset management and business processing services to education, health care, and government clients at the federal, state, and local levels in the United States. The company operates in three segments: Federal Family Education Loan Program (FFELP) Loans, Private Education Loans, and Business Services. It holds the portfolio of education loans insured or guaranteed under the FFELP, as well as the portfolio of private education loans; and originates private education refinance loans. The company also services education loans owned by the United States Department of Education, financial institutions, and nonprofit education lenders. In addition, it offers asset recovery services for loans and receivables on behalf of guarantors of FFELP loans and higher education institutions. Further, the company provides asset recovery and other business processing services for federal, state, court, and municipal clients; public authorities; and health care organizations. Navient Corporation was founded in 1973 and is headquartered in Wilmington, Delaware.

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