DB:SM1

Stock Analysis Report

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Executive Summary

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.


Snowflake Analysis

Undervalued second-rate dividend payer.


Similar Companies

Share Price & News

How has SLM's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SM1's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-0.05%

SM1

2.2%

DE Consumer Finance

2.6%

DE Market


1 Year Return

-24.3%

SM1

-27.3%

DE Consumer Finance

8.1%

DE Market

Return vs Industry: SM1 exceeded the German Consumer Finance industry which returned -27.3% over the past year.

Return vs Market: SM1 underperformed the German Market which returned 8.1% over the past year.


Shareholder returns

SM1IndustryMarket
7 Day-0.05%2.2%2.6%
30 Day-0.2%6.9%-0.08%
90 Day-22.4%14.7%12.1%
1 Year-23.3%-24.3%-25.8%-27.3%10.5%8.1%
3 Year-33.4%-34.7%-45.5%-53.8%6.4%-2.1%
5 Year-26.9%-28.3%-45.3%-59.6%15.2%-0.3%

Price Volatility Vs. Market

How volatile is SLM's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is SLM undervalued compared to its fair value and its price relative to the market?

39.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SM1 (€5.7) is trading below our estimate of fair value (€9.46)

Significantly Below Fair Value: SM1 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SM1 is good value based on its PE Ratio (5.4x) compared to the XE Consumer Finance industry average (6.7x).

PE vs Market: SM1 is good value based on its PE Ratio (5.4x) compared to the German market (21.5x).


Price to Earnings Growth Ratio

PEG Ratio: SM1 is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: SM1 is overvalued based on its PB Ratio (1.6x) compared to the XE Consumer Finance industry average (0.9x).


Next Steps

Future Growth

How is SLM forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

7.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SM1's forecast earnings growth (7.8% per year) is above the savings rate (0.2%).

Earnings vs Market: SM1's earnings (7.8% per year) are forecast to grow slower than the German market (24% per year).

High Growth Earnings: SM1's earnings are forecast to grow, but not significantly.

Revenue vs Market: SM1's revenue (1.1% per year) is forecast to grow slower than the German market (5.8% per year).

High Growth Revenue: SM1's revenue (1.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SM1's Return on Equity is forecast to be high in 3 years time (22.9%)


Next Steps

Past Performance

How has SLM performed over the past 5 years?

24.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SM1 has a high level of non-cash earnings.

Growing Profit Margin: SM1's current net profit margins (41.4%) are lower than last year (44.6%).


Past Earnings Growth Analysis

Earnings Trend: SM1's earnings have grown significantly by 24.6% per year over the past 5 years.

Accelerating Growth: SM1's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SM1 had negative earnings growth (-1.9%) over the past year, making it difficult to compare to the Consumer Finance industry average (3.1%).


Return on Equity

High ROE: Whilst SM1's Return on Equity (27.11%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is SLM's financial position?


Financial Position Analysis

Short Term Liabilities: SM1's short term assets ($28.1B) exceed its short term liabilities ($23.6B).

Long Term Liabilities: SM1's short term assets ($28.1B) exceed its long term liabilities ($4.8B).


Debt to Equity History and Analysis

Debt Level: SM1's debt to equity ratio (220.6%) is considered high.

Reducing Debt: SM1's debt to equity ratio has increased from 2.2% to 220.6% over the past 5 years.

Debt Coverage: SM1's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: Insufficient data to determine if SM1's interest payments on its debt are well covered by EBIT.


Balance Sheet


Next Steps

Dividend

What is SLM current dividend yield, its reliability and sustainability?

1.72%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: SM1's dividend (1.72%) is higher than the bottom 25% of dividend payers in the German market (1.23%).

High Dividend: SM1's dividend (1.72%) is low compared to the top 25% of dividend payers in the German market (3.78%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, SM1 has been paying a dividend for less than 10 years.

Growing Dividend: SM1 has only been paying a dividend for 2 years, and since then payments have not increased.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (9.2%), SM1's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SM1's dividends in 3 years are forecast to be thoroughly covered by earnings (8.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.3yrs

Average management tenure


CEO

Jon Witter (50 yo)

0.33

Tenure

Mr. Jonathan W. Witter, also known as Jon, serves as Chief Executive Officer & Director at SLM Corporation since April 20, 2020. He is the Executive Vice President and Chief Customer Officer of Hilton Dome ...


Leadership Team

NamePositionTenureCompensationOwnership
Steven McGarry
Executive VP & CFO6.25yrsUS$1.96m0.059%
$ 1.3m
Paul Thome
Executive VP & Chief Administrative Officer4.5yrsUS$1.61m0.036%
$ 804.7k
Nicolas Jafarieh
Senior VP & General Counsel2.42yrsUS$1.33m0.024%
$ 529.5k
Donna Vieira
Executive VP & Chief Marketing Officer1.58yrsUS$2.12m0.0025%
$ 55.7k
Jonathan Witter
CEO & Director0.33yrno datano data
Brian Cronin
Senior Director of Investor Relationsno datano datano data
Jim Truitt
Chief Compliance Officer and Senior Vice President12.08yrsno datano data
Martha Holler
Senior Vice President of Corporate Marketing & Communicationsno datano datano data
Tim Morrison
Senior Vice President of Government Relationsno datano datano data
Joni Reich
Executive Vice President of Administration8.42yrsno datano data
Denise Chaisson
Executive Vice Presidentno datano datano data
Jeffrey Dale
Chief Risk Officer & Senior VP6.08yrsUS$1.38m0.0092%
$ 204.6k

5.3yrs

Average Tenure

56.5yo

Average Age

Experienced Management: SM1's management team is seasoned and experienced (5.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Jonathan Witter
CEO & Director0.33yrno datano data
William Shiebler
Independent Director6.33yrsUS$205.01k0.021%
$ 466.0k
Earl Goode
Independent Director20.08yrsUS$200.01k0.038%
$ 840.1k
Marianne Keler
Independent Director6.33yrsUS$202.52k0.027%
$ 597.0k
Mark Lavelle
Independent Director1.33yrsUS$165.02k0.0064%
$ 142.4k
Vivian Schneck-Last
Independent Director5.42yrsUS$195.02k0.015%
$ 343.6k
Frank Puleo
Independent Director12.42yrsUS$205.01k0.041%
$ 906.1k
Kirsten Wolberg
Independent Director3.75yrsUS$190.02k0.010%
$ 233.3k
Paul Child
Lead Independent Director6.58yrsUS$222.51k0.018%
$ 390.6k
Mary Carter Franke
Chair of the Board0.17yrUS$195.02k0.017%
$ 379.7k
Robert Strong
Independent Director6.33yrsUS$195.01k0.022%
$ 480.7k
James Matheson
Independent Director5.42yrsUS$190.02k0.016%
$ 347.2k

5.9yrs

Average Tenure

64yo

Average Age

Experienced Board: SM1's board of directors are considered experienced (5.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

SLM Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: SLM Corporation
  • Ticker: SM1
  • Exchange: DB
  • Founded: 1972
  • Industry: Consumer Finance
  • Sector: Diversified Financials
  • Market Cap: US$2.627b
  • Listing Market Cap: US$2.228b
  • Shares outstanding: 375.24m
  • Website: https://www.salliemae.com

Number of Employees


Location

  • SLM Corporation
  • 300 Continental Drive
  • Newark
  • Delaware
  • 19713
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SLMNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDMay 2014
SLMB.PNasdaqGS (Nasdaq Global Select)PFD SER B USUSDMay 2014
SM1DB (Deutsche Boerse AG)YesCommon StockDEEURMay 2014
SLM *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNMay 2014

Biography

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 also offers retail ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/08/09 20:54
End of Day Share Price2020/08/07 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.