Nelnet (NNI) versus Credit Acceptance (CACC) Financial Contrast

Nelnet (NYSE: NNI) and Credit Acceptance (NASDAQ:CACC) are both mid-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, analyst recommendations, earnings, valuation and risk.

Analyst Ratings

This is a summary of recent ratings and price targets for Nelnet and Credit Acceptance, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nelnet 0 1 1 0 2.50
Credit Acceptance 4 3 1 0 1.63

Nelnet presently has a consensus price target of $53.50, indicating a potential downside of 8.77%. Credit Acceptance has a consensus price target of $276.71, indicating a potential downside of 21.16%. Given Nelnet’s stronger consensus rating and higher probable upside, equities analysts clearly believe Nelnet is more favorable than Credit Acceptance.

Dividends

Nelnet pays an annual dividend of $0.64 per share and has a dividend yield of 1.1%. Credit Acceptance does not pay a dividend. Nelnet has increased its dividend for 2 consecutive years.

Risk & Volatility

Nelnet has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500. Comparatively, Credit Acceptance has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500.

Valuation & Earnings

This table compares Nelnet and Credit Acceptance’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nelnet $1.20 billion 1.98 $173.16 million N/A N/A
Credit Acceptance $1.11 billion 6.11 $470.20 million $20.44 17.17

Credit Acceptance has lower revenue, but higher earnings than Nelnet.

Profitability

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

Net Margins Return on Equity Return on Assets
Nelnet 17.43% 9.28% 0.82%
Credit Acceptance 43.49% 29.44% 8.50%

Institutional & Insider Ownership

38.7% of Nelnet shares are held by institutional investors. Comparatively, 69.8% of Credit Acceptance shares are held by institutional investors. 46.1% of Nelnet shares are held by company insiders. Comparatively, 5.4% of Credit Acceptance shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

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.

About Credit Acceptance

Credit Acceptance Corporation provides financing programs, and related products and services to independent and franchised automobile dealers in the United States. The company advances money to dealers in exchange for the right to service the underlying consumer loans; and buys the consumer loans from the dealers and keeps various amounts collected from the consumers. It is also involved in the business of reinsuring coverage under vehicle service contracts sold to consumers by dealers on vehicles financed by the company. Credit Acceptance Corporation was founded in 1972 and is headquartered in Southfield, Michigan.

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