Atlanticus (NASDAQ:ATLC) and Nelnet (NNI) Critical Comparison

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Atlanticus (NASDAQ:ATLC) and Nelnet (NYSE:NNI) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, profitability, dividends, institutional ownership, valuation, analyst recommendations and earnings.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Atlanticus and Nelnet, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlanticus 0 0 0 0 N/A
Nelnet 0 0 0 0 N/A

Institutional and Insider Ownership

14.9% of Atlanticus shares are owned by institutional investors. Comparatively, 37.5% of Nelnet shares are owned by institutional investors. 34.3% of Atlanticus shares are owned by company insiders. Comparatively, 47.0% of Nelnet shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Nelnet pays an annual dividend of $0.72 per share and has a dividend yield of 1.4%. Atlanticus does not pay a dividend. Nelnet has raised its dividend for 3 consecutive years.

Profitability

This table compares Atlanticus and Nelnet’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlanticus -21.62% N/A -7.51%
Nelnet 15.43% 9.48% 0.87%

Earnings and Valuation

This table compares Atlanticus and Nelnet’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Atlanticus $121.14 million 0.39 -$40.78 million N/A N/A
Nelnet $1.20 billion 1.81 $173.16 million N/A N/A

Nelnet has higher revenue and earnings than Atlanticus.

Volatility and Risk

Atlanticus has a beta of 0.17, meaning that its share price is 83% less volatile than the S&P 500. Comparatively, Nelnet has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500.

Summary

Nelnet beats Atlanticus on 11 of the 11 factors compared between the two stocks.

About Atlanticus

Atlanticus Holdings Corporation provides credit and related financial services and products to financially underserved consumer credit market in the United States. It operates in two segments, Credit and Other Investments, and Auto Finance. The Credit and Other Investments segment originates a range of consumer loan products, such as retail credit, personal loans, and credit cards through various channels, including retail point-of-sale, direct mail solicitation, Internet-based marketing, and partnerships with third parties; and offers point-of-sale financing by partnering with retailers and service providers to provide credit to their customers for the purchase of various goods and services. This segment also invests in and services portfolios of credit card receivables. In addition, this segment offers loan servicing, such as risk management and customer service outsourcing for third parties; and engages in testing and investment activities in consumer finance technology platforms. The Auto Finance segment purchases and/or services loans secured by automobiles from or for a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here, and used car business. This segment also provides floor plan financing and installment lending products. The company was formerly known as CompuCredit Holdings Corporation and changed its name to Atlanticus Holdings Corporation in November 2012. Atlanticus Holdings Corporation was founded in 1996 and is headquartered in Atlanta, Georgia.

About Nelnet

Nelnet, Inc. provides education related products and services, and loan asset management services worldwide. The company's Loan Systems and Servicing segment is involved in loan servicing activities, such as loan conversion, application processing, borrower updates, customer service, payment processing, due diligence procedures, funds management reconciliation, and claim processing activities for student loan portfolio and third-party clients. This segment also provides software and data center, default aversion tracking, claim processing, and post-default collection services, as well as borrower and loan updates for guarantee agencies, and contact center solutions; and licenses student loan servicing software to third-party student loan holders and servicers. Its Tuition Payment Processing and Campus Commerce segment offers products and services to help students and families to manage the payment of education costs; school information system software; professional development and educational instruction services to K-12 schools; and education-focused technologies, services, and support solutions to schools for collecting and processing commerce data. It also provides electronic transfer and credit card processing, reporting, billing and invoicing, and integration services; and mobile and virtual terminal solutions for business software products. Its Communications segment provides Internet access, data connectivity, Internet protocol television video, video on demand, and high-definition television services; digital video recorders to residential and business subscribers; and local calling and long-distance telephone services. This segment offers its services through direct marketing, call and communication centers, and sales representatives; and its Website. Its Asset Generation and Management segment acquires, manages, and owns loan assets. It also provides investment advisory services. The company was founded in 1978 and is headquartered in Lincoln, Nebraska.

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