Navient vs AES Which Should You Buy?

Navient and AES are two companies in the financial sector that offer services related to student loans. Navient, formerly part of Sallie Mae, focuses on servicing and collecting student loans, while AES is involved in loan originations and servicing. Both companies have faced scrutiny regarding their practices and customer service. Investors may be interested in comparing the performance and growth potential of Navient and AES stocks to make informed decisions about their investment portfolios in the education finance sector.

Navient or AES?

When comparing Navient and AES, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Navient and AES.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Navient has a dividend yield of 4.32%, while AES has a dividend yield of 5.17%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Navient reports a 5-year dividend growth of 0.00% year and a payout ratio of 38.71%. On the other hand, AES reports a 5-year dividend growth of 5.00% year and a payout ratio of 49.42%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Navient P/E ratio at 8.61 and AES's P/E ratio at 9.94. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Navient P/B ratio is 0.59 while AES's P/B ratio is 2.89.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Navient has seen a 5-year revenue growth of 3.89%, while AES's is 0.43%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Navient's ROE at 6.79% and AES's ROE at 32.46%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $14.79 for Navient and $13.09 for AES. Over the past year, Navient's prices ranged from $13.71 to $19.68, with a yearly change of 43.54%. AES's prices fluctuated between $12.53 and $22.21, with a yearly change of 77.25%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.