NasdaqGS:SLM

Stock Analysis Report

Executive Summary

SLM Corporation, through its subsidiaries, operates as a saving, planning, and paying for college company in the United States.

Rewards

Trading at 58.6% below its fair value

Earnings are forecast to grow 8.1% per year

Earnings grew by 19% over the past year

Risk Analysis

Highly volatile share price over past 3 months



Snowflake Analysis

Proven track record and fair value.


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: SLM's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

0.4%

SLM

0.4%

US Consumer Finance

0.5%

US Market


1 Year Return

5.4%

SLM

14.6%

US Consumer Finance

20.3%

US Market

Return vs Industry: SLM underperformed the US Consumer Finance industry which returned 14.6% over the past year.

Return vs Market: SLM underperformed the US Market which returned 20.3% over the past year.


Shareholder returns

SLMIndustryMarket
7 Day0.4%0.4%0.5%
30 Day35.7%1.1%2.0%
90 Day37.0%5.5%9.4%
1 Year6.7%5.4%16.5%14.6%22.8%20.3%
3 Year1.7%0.4%40.4%33.6%50.1%40.4%
5 Year27.8%26.1%45.5%35.1%73.1%54.1%

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

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SLM ($11.97) is trading below our estimate of fair value ($28.89)

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


Price To Earnings Ratio

PE vs Industry: SLM is poor value based on its PE Ratio (9.1x) compared to the Consumer Finance industry average (8.7x).

PE vs Market: SLM is good value based on its PE Ratio (9.1x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: SLM is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: SLM is overvalued based on its PB Ratio (1.7x) compared to the US Consumer Finance industry average (1.1x).


Next Steps

Future Growth

How is SLM forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

8.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SLM's forecast earnings growth (8.1% per year) is above the savings rate (1.7%).

Earnings vs Market: SLM's earnings (8.1% per year) are forecast to grow slower than the US market (14.2% per year).

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

Revenue vs Market: SLM's revenue (8% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: SLM's revenue (8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SLM's Return on Equity is forecast to be high in 3 years time (29.6%)


Next Steps

Past Performance

How has SLM performed over the past 5 years?

23.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SLM has high quality earnings.

Growing Profit Margin: SLM's current net profit margins (42.6%) are higher than last year (42.3%).


Past Earnings Growth Analysis

Earnings Trend: SLM's earnings have grown significantly by 23.6% per year over the past 5 years.

Accelerating Growth: SLM's earnings growth over the past year (19%) is below its 5-year average (23.6% per year).

Earnings vs Industry: SLM earnings growth over the past year (19%) exceeded the Consumer Finance industry 11.4%.


Return on Equity

High ROE: SLM's Return on Equity (17.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is SLM's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: SLM has a low level of unsold assets or inventory.

Debt Coverage by Assets: SLM's debt is covered by short term assets (assets are 6.9x debt).


Financial Institutions Analysis

Asset Level: SLM's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if SLM has a sufficient allowance for bad loans.

Low Risk Liabilities: SLM reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if SLM has an acceptable proportion of non-loan assets held.

Low Risk Deposits: SLM has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if SLM has an appropriate level of bad loans.


Next Steps

Dividend

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

1.00%

Current Dividend Yield


Upcoming Dividend Payment

Purchase SLM before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company1.0%marketbottom25%1.4%markettop25%3.7%industryaverage2.0%forecastin3Years1.3%

Current dividend yield vs market & industry

Notable Dividend: SLM's dividend (1%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: SLM's dividend (1%) is low compared to the top 25% of dividend payers in the US market (3.73%).


Stability and Growth of Payments

Stable Dividend: SLM has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: SLM has only been paying a dividend for 6 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (9.1%), SLM's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SLM's dividends in 3 years are forecast to be thoroughly covered by earnings (8.1% payout ratio).


Next Steps

Management

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

5.6yrs

Average management tenure


CEO

Ray Quinlan (67yo)

5.8yrs

Tenure

US$6,187,641

Compensation

Mr. Raymond J. Quinlan, also known as Ray, has been the Executive Chairman and Chief Executive Officer of SLM Corporation since April 29, 2014. Mr. Quinlan has 40+ years of tradition with the challenge, mo ...


CEO Compensation Analysis

Compensation vs Market: Ray's total compensation ($USD6.19M) is about average for companies of similar size in the US market ($USD6.27M).

Compensation vs Earnings: Ray's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Raymond Quinlan
Executive Chairman & CEO5.8yrsUS$6.19m0.25% $12.4m
Steven McGarry
Executive VP & CFO5.8yrsUS$2.13m0.052% $2.6m
Paul Thome
Executive VP & Chief Administrative Officer4yrsUS$1.66m0.032% $1.6m
Nicolas Jafarieh
Senior VP & General Counsel1.9yrsUS$1.38m0.021% $1.1m
Jeffrey Dale
Chief Risk Officer & Senior VP5.6yrsUS$1.38m0.0082% $412.3k
Brian Cronin
Senior Director of Investor Relations0yrsno datano data
Jim Truitt
Chief Compliance Officer and Senior Vice President11.6yrsno datano data
Martha Holler
Senior Vice President of Corporate Marketing & Communications0yrsno datano data
Donna Vieira
Executive VP & Chief Marketing Officer1.1yrsno data0.0023% $116.4k
Tim Morrison
Senior Vice President of Government Relations0yrsno datano data

5.6yrs

Average Tenure

59yo

Average Age

Experienced Management: SLM's management team is seasoned and experienced (5.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Raymond Quinlan
Executive Chairman & CEO5.8yrsUS$6.19m0.25% $12.4m
William Shiebler
Independent Director5.8yrsUS$195.00k0.016% $782.3k
Earl Goode
Independent Director19.6yrsUS$190.00k0.030% $1.5m
Marianne Keler
Independent Director5.8yrsUS$190.01k0.021% $1.0m
Vivian Schneck-Last
Independent Director4.9yrsUS$185.01k0.011% $535.3k
Frank Puleo
Independent Director11.9yrsUS$195.01k0.033% $1.7m
Paul Child
Lead Independent Director6.1yrsUS$205.01k0.013% $630.6k
Mary Carter Franke
Independent Director5.8yrsUS$185.01k0.012% $607.9k
Robert Strong
Independent Director5.8yrsUS$180.01k0.016% $811.0k
James Matheson
Independent Director4.9yrsUS$180.01k0.011% $536.3k

5.8yrs

Average Tenure

68yo

Average Age

Experienced Board: SLM's board of directors are considered experienced (5.8 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.


Recent Insider Transactions

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: SLM
  • Exchange: NasdaqGS
  • Founded: 1972
  • Industry: Consumer Finance
  • Sector: Diversified Financials
  • Market Cap: US$5.041b
  • Shares outstanding: 421.10m
  • 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, operates as a saving, planning, and paying for college company in the United States. The company originates and services private education loans to students or their families. It also offers retail deposit accounts, including certificates of deposit, money market deposit accounts, and high yield savings accounts; omnibus accounts; and a consumer savings network that provides financial rewards on everyday purchases to help families save for college. 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. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 02:42
End of Day Share Price2020/02/19 00:00
Earnings2019/12/31
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.