BlackRock (NYSE: BLK) and Navient (NASDAQ:NAVI) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, institutional ownership, earnings, profitability, dividends, valuation and analyst recommendations.
BlackRock pays an annual dividend of $11.52 per share and has a dividend yield of 2.2%. Navient pays an annual dividend of $0.64 per share and has a dividend yield of 4.8%. BlackRock pays out 51.0% 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. BlackRock has raised its dividend for 8 consecutive years. Navient is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a summary of current recommendations and price targets for BlackRock and Navient, as reported by MarketBeat.com.
||Strong Buy Ratings
BlackRock presently has a consensus target price of $562.67, suggesting a potential upside of 7.29%. Navient has a consensus target price of $18.00, suggesting a potential upside of 35.54%. Given Navient’s higher probable upside, analysts clearly believe Navient is more favorable than BlackRock.
Earnings & Valuation
This table compares BlackRock and Navient’s top-line revenue, earnings per share and valuation.
||Earnings Per Share
BlackRock has higher revenue and earnings than Navient. Navient is trading at a lower price-to-earnings ratio than BlackRock, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
84.8% of BlackRock shares are owned by institutional investors. Comparatively, 97.9% of Navient shares are owned by institutional investors. 1.9% of BlackRock shares are owned by company insiders. Comparatively, 1.7% of Navient shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Volatility and Risk
BlackRock has a beta of 1.67, meaning that its stock price is 67% more volatile than the S&P 500. Comparatively, Navient has a beta of 2.2, meaning that its stock price is 120% more volatile than the S&P 500.
This table compares BlackRock and Navient’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
BlackRock beats Navient on 11 of the 17 factors compared between the two stocks.
BlackRock, Inc. is a publicly owned investment manager. The firm primarily provides its services to institutional, intermediary, and individual investors including corporate, public, union, and industry pension plans, insurance companies, third-party mutual funds, endowments, public institutions, governments, foundations, charities, sovereign wealth funds, corporations, official institutions, and banks. It also provides global risk management and advisory services. The firm manages separate client-focused equity, fixed income, and balanced portfolios. It also launches and manages open-end and closed-end mutual funds, offshore funds, unit trusts, and alternative investment vehicles including structured funds. The firm launches equity, fixed income, balanced, and real estate mutual funds. It also launches equity, fixed income, balanced, currency, commodity, and multi-asset exchange traded funds. The firm also launches and manages hedge funds. It invests in the public equity, fixed income, real estate, currency, commodity, and alternative markets across the globe. The firm primarily invests in growth and value stocks of small-cap, mid-cap, SMID-cap, large-cap, and multi-cap companies. It also invests in dividend-paying equity securities. The firm invests in investment grade municipal securities, government securities including securities issued or guaranteed by a government or a government agency or instrumentality, corporate bonds, and asset-backed and mortgage-backed securities. It employs fundamental and quantitative analysis with a focus on bottom-up and top-down approach to make its investments. The firm employs liquidity, asset allocation, balanced, real estate, and alternative strategies to make its investments. In real estate sector, it seeks to invest in Poland and Germany. The firm benchmarks the performance of its portfolios against various S&P, Russell, Barclays, MSCI, Citigroup, and Merrill Lynch indices. BlackRock, Inc. was founded in 1988 and is based in New York City with additional offices in Boston, Massachusetts; London, United Kingdom; Gurgaon, India; Hong Kong; Greenwich, Connecticut; Princeton, New Jersey; Edinburgh, United Kingdom; Sydney, Australia; Taipei, Taiwan; Singapore; Sao Paulo, Brazil; Philadelphia, Pennsylvania; Washington, District of Columbia; Toronto, Canada; Wilmington, Delaware; and San Francisco, California.
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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