Contrasting TPG RE Finance Trust (TRTX) and Navient Corporation (NAVI)

TPG RE Finance Trust (NASDAQ: TRTX) and Navient Corporation (NASDAQ:NAVI) are both consumer lending – nec companies, but which is the better business? We will compare the two companies based on the strength of their earnings, valuation, risk, institutional ownership, dividends, profitability and analyst recommendations.

Earnings and Valuation

This table compares TPG RE Finance Trust and Navient Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
TPG RE Finance Trust N/A N/A N/A $1.47 13.22
Navient Corporation $4.97 billion 0.65 $681.00 million $1.81 6.75

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

Institutional & Insider Ownership

95.8% of Navient Corporation shares are owned by institutional investors. 1.7% of Navient Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for TPG RE Finance Trust and Navient Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TPG RE Finance Trust 0 2 3 0 2.60
Navient Corporation 0 6 5 0 2.45

TPG RE Finance Trust currently has a consensus target price of $21.20, indicating a potential upside of 9.11%. Navient Corporation has a consensus target price of $18.27, indicating a potential upside of 49.65%. Given Navient Corporation’s higher probable upside, analysts clearly believe Navient Corporation is more favorable than TPG RE Finance Trust.

Profitability

This table compares TPG RE Finance Trust and Navient Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TPG RE Finance Trust 48.73% 10.27% 3.73%
Navient Corporation 10.88% 14.09% 0.43%

Dividends

Navient Corporation pays an annual dividend of $0.64 per share and has a dividend yield of 5.2%. TPG RE Finance Trust does not pay a dividend. Navient Corporation pays out 35.4% of its earnings in the form of a dividend.

Summary

Navient Corporation beats TPG RE Finance Trust on 8 of the 12 factors compared between the two stocks.

About TPG RE Finance Trust

TPG RE Finance Trust, Inc. is a commercial real estate finance company. The Company is engaged in originating, acquiring and managing commercial mortgage loans and other commercial real estate-related debt instruments. It focuses primarily on directly originating and selectively acquiring floating rate first mortgage loans that are secured by high quality commercial real estate properties undergoing some form of transition and value creation, such as re-tenanting, refurbishment or other form of repositioning. As of December 31, 2016, the Company’s portfolio consisted of 54 first mortgage loans. As of December 31, 2016, 97% of the loan commitments in its portfolio consisted of floating rate loans, and 98.6% of the loan commitments in its portfolio consisted of first mortgage loans.

About Navient Corporation

Navient Corporation provides asset management and business processing services to education, healthcare and government clients at the federal, state and local levels. The Company holds the portfolio of education loans insured or federally guaranteed under the Federal Family Education Loan Program (FFELP). It operates through four segments: FFELP Loans, Private Education Loans, Business Services and Other. It also holds the portfolio of Private Education Loans. It services its own portfolio of education loans, as well as education loans owned by the United States Department of Education (ED), financial institutions and nonprofit education lenders. It also provides business processing services to education-related clients, such as guaranty agencies and colleges and universities. It provides additional business processing services to a range of other clients, including federal agencies, state and local governments, healthcare systems and other healthcare providers and municipalities.

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