Head to Head Contrast: LendingClub (NYSE:LC) versus SLM (NASDAQ:SLMBP)

SLM (NASDAQ:SLMBP) and LendingClub (NYSE:LC) are both financial services companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.

Profitability

This table compares SLM and LendingClub’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SLM	N/A	N/A	N/A
LendingClub	10.94%	7.81%	1.01%

Analyst Recommendations

This is a breakdown of current ratings and target prices for SLM and LendingClub, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SLM	0	0	0	0	0.00
LendingClub	0	4	7	0	2.64

LendingClub has a consensus target price of $19.00, indicating a potential upside of 3.75%. Given LendingClub’s stronger consensus rating and higher possible upside, analysts plainly believe LendingClub is more favorable than SLM.

Institutional & Insider Ownership

74.1% of LendingClub shares are held by institutional investors. 3.2% of LendingClub shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares SLM and LendingClub”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SLM	$1.76 billion	N/A	N/A	N/A	N/A
LendingClub	$787.01 million	2.67	$51.33 million	$0.64	28.61

LendingClub has lower revenue, but higher earnings than SLM.

Summary

LendingClub beats SLM on 8 of the 9 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 LendingClub

LendingClub Corporation, operates as a bank holding company, that provides range of financial products and services in the United States. It offers deposit products, including savings accounts, checking accounts, and certificates of deposit. The company also provides loan products, such as consumer loans comprising unsecured personal loans, secured auto refinance loans, and patient and education finance loans; and commercial loans, including small business loans. In addition, it operates an online lending marketplace platform. The company was incorporated in 2006 and is headquartered in San Francisco, California.