Navient: Free Call On High Margin Growth Opportunities
- 3.9% dividend yield; 7.8x price-to-earnings ratio; 6% discount to lowest analyst target; 19% discount to average analyst target; 41% upside to high target.
- Portfolio with low credit risk (77% effectively guaranteed by the Federal Government; balance is high quality) and low funding risk (80% of loan portfolio is funded to term).
- High margin growth opportunities by levering its scale and expertise.
- Experienced and shareholder friendly management; will distribute 30% of earnings as dividend and will use a bulk of the balance to repurchase shares.