SLM (NASDAQ:SLM – Get Free Report) and LendingTree (NASDAQ:TREE – Get Free Report) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, risk, institutional ownership and valuation.
Valuation and Earnings
This table compares SLM and LendingTree”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| SLM | $2.63 billion | 1.86 | $744.85 million | $3.58 | 7.27 |
| LendingTree | $1.12 billion | 0.34 | $151.31 million | $12.90 | 2.08 |
Institutional & Insider Ownership
98.9% of SLM shares are held by institutional investors. Comparatively, 68.3% of LendingTree shares are held by institutional investors. 1.4% of SLM shares are held by insiders. Comparatively, 4.0% of LendingTree shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Profitability
This table compares SLM and LendingTree’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| SLM | 26.09% | 33.81% | 2.51% |
| LendingTree | 14.33% | 14.57% | 4.49% |
Volatility & Risk
SLM has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500. Comparatively, LendingTree has a beta of 2.05, indicating that its stock price is 105% more volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current recommendations and price targets for SLM and LendingTree, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| SLM | 1 | 6 | 5 | 0 | 2.33 |
| LendingTree | 0 | 2 | 5 | 0 | 2.71 |
SLM currently has a consensus price target of $29.80, suggesting a potential upside of 14.44%. LendingTree has a consensus price target of $61.33, suggesting a potential upside of 128.69%. Given LendingTree’s stronger consensus rating and higher probable upside, analysts clearly believe LendingTree is more favorable than SLM.
Summary
SLM beats LendingTree on 7 of the 13 factors compared between the two stocks.
About SLM
SLM Corporation, through its subsidiaries, originates and services private education loans to students and their families to finance the cost of their education in the United States. It is also involved in the provision of retail deposit accounts, including certificates of deposit, money market accounts, and high-yield savings accounts; and interest-bearing omnibus accounts. The company was formerly known as New BLC Corporation and changed its name to SLM Corporation in December 2013. SLM Corporation was founded in 1972 and is headquartered in Newark, Delaware.
About LendingTree
LendingTree, Inc., through its subsidiary, operates online consumer platform in the United States. It operates through three segments: Home, Consumer, and Insurance. The Home segment offers purchase mortgage, refinance mortgage, and home equity loans and lines of credit; and real estate brokerage services. The Consumer segment provides credit cards; personal, small business, student, and auto loans; deposit accounts; and other credit products, such as debt settlement services. The Insurance segment includes information, tools, and access to insurance quote products, including home, automobile, and health and Medicare through which consumers are matched with insurance lead aggregators to obtain insurance offers and policies. In addition, the company offers QuoteWizard, a marketplace for insurance comparison; ValuePenguin, a personal finance website that offers consumers objective analysis on various financial topics from insurance to credit cards; and Stash, a consumer investing and banking platform that offers a suite of personal investment accounts, traditional and Roth IRAs, custodial investment accounts, and banking services, including checking accounts and debit cards with a Stock-Back rewards program. The company was formerly known as Tree.com, Inc. and changed its name to LendingTree, Inc. in January 2015. LendingTree, Inc. was incorporated in 1996 and is based in Charlotte, North Carolina.
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