Reviewing SLM (NASDAQ:SLM) & Consumer Portfolio Services (NASDAQ:CPSS)

Consumer Portfolio Services (NASDAQ:CPSS) and SLM (NASDAQ:SLM) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, analyst recommendations, valuation, institutional ownership, profitability and earnings.

Earnings and Valuation

This table compares Consumer Portfolio Services and SLM”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Consumer Portfolio Services	$208.84 million	0.96	$19.33 million	$0.92	10.11
SLM	$2.63 billion	1.89	$744.85 million	$3.58	7.39

SLM has higher revenue and earnings than Consumer Portfolio Services. SLM is trading at a lower price-to-earnings ratio than Consumer Portfolio Services, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Consumer Portfolio Services and SLM’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Consumer Portfolio Services	4.78%	6.91%	0.54%
SLM	26.09%	33.81%	2.51%

Institutional & Insider Ownership

47.6% of Consumer Portfolio Services shares are owned by institutional investors. Comparatively, 98.9% of SLM shares are owned by institutional investors. 63.7% of Consumer Portfolio Services shares are owned by insiders. Comparatively, 1.4% of SLM shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Consumer Portfolio Services has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500. Comparatively, SLM has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Consumer Portfolio Services and SLM, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Consumer Portfolio Services	0	1	0	0	2.00
SLM	1	6	5	0	2.33

SLM has a consensus price target of $29.80, suggesting a potential upside of 12.62%. Given SLM’s stronger consensus rating and higher probable upside, analysts clearly believe SLM is more favorable than Consumer Portfolio Services.

Summary

SLM beats Consumer Portfolio Services on 11 of the 14 factors compared between the two stocks.

About Consumer Portfolio Services

Consumer Portfolio Services, Inc. operates as a specialty finance company in the United States. It is involved in the purchase and service of retail automobile contracts originated by franchised automobile dealers and select independent dealers in the sale of new and used automobiles, light trucks, and passenger vans. The company, through its automobile contract purchases, offers indirect financing to the customers of dealers with limited credit histories or past credit problems. It also serves as an alternative source of financing for dealers, facilitating sales to customers who are not able to obtain financing from commercial banks, credit unions, and the captive finance companies. In addition, the company acquires installment purchase contracts in merger and acquisition transactions; purchases immaterial amounts of vehicle purchase money loans from non-affiliated lenders. It services its automobile contracts through its branches in California, Nevada, Virginia, Florida, and Illinois. The company was incorporated in 1991 and is based in Las Vegas, Nevada.

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.