Bread Financial (NYSE:BFH – Get Free Report) and SLM (NASDAQ:SLM – Get Free Report) are both business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, risk, profitability and dividends.
Volatility and Risk
Bread Financial has a beta of 1.92, meaning that its share price is 92% more volatile than the S&P 500. Comparatively, SLM has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500.
Insider and Institutional Ownership
99.5% of Bread Financial shares are held by institutional investors. Comparatively, 98.9% of SLM shares are held by institutional investors. 0.6% of Bread Financial shares are held by company insiders. Comparatively, 0.9% of SLM shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Dividends
Profitability
This table compares Bread Financial and SLM’s net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
Bread Financial | 8.08% | 14.44% | 1.88% |
SLM | 25.15% | 45.65% | 2.63% |
Analyst Ratings
This is a breakdown of recent ratings and target prices for Bread Financial and SLM, as provided by MarketBeat.com.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
Bread Financial | 4 | 7 | 3 | 0 | 1.93 |
SLM | 0 | 2 | 8 | 0 | 2.80 |
Bread Financial presently has a consensus price target of $39.17, indicating a potential downside of 2.72%. SLM has a consensus price target of $21.32, indicating a potential downside of 2.83%. Given Bread Financial’s higher probable upside, equities analysts plainly believe Bread Financial is more favorable than SLM.
Valuation & Earnings
This table compares Bread Financial and SLM’s revenue, earnings per share (EPS) and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
Bread Financial | $5.17 billion | 0.39 | $718.00 million | $7.94 | 5.07 |
SLM | $1.94 billion | 2.48 | $581.39 million | $3.20 | 6.86 |
Bread Financial has higher revenue and earnings than SLM. Bread Financial is trading at a lower price-to-earnings ratio than SLM, indicating that it is currently the more affordable of the two stocks.
About Bread Financial
Bread Financial Holdings, Inc. provides tech-forward payment and lending solutions to customers and consumer-based industries in North America. It offers credit card and other loans financing services, including risk management solutions, account origination, and funding services for private label and co-brand credit card programs, as well as through Bread partnerships; and Comenity-branded general purpose cash-back credit. The company also manages and services the loans it originates for private label, co-brand, and general-purpose credit card programs, and installment loans and split-pay products; and provides marketing, and data and analytics services. In addition, it offers an enhanced digital suite that includes a unified software development kit, which provides access to its suite of products, as well as promotes credit payment options earlier in the shopping experience. Further, the company through Bread, a digital payments platform and robust suite of application programming interfaces allows merchants and partners to integrate online point-of-sale financing and other digital payment products. It offers its products under the Bread CashbackTM, Bread PayTM, and Bread SavingsTM brands. The company was formerly known as Alliance Data Systems Corporation and changed its name to Bread Financial Holdings, Inc. in March 2022. Bread Financial Holdings, Inc. was incorporated in 1995 and is headquartered in Columbus, Ohio.
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.
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