Analyzing Nelnet (NYSE:NNI) & Manhattan Bridge Capital (NASDAQ:LOAN)

Nelnet (NYSE:NNI) and Manhattan Bridge Capital (NASDAQ:LOAN) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Insider and Institutional Ownership

33.5% of Nelnet shares are held by institutional investors. Comparatively, 21.8% of Manhattan Bridge Capital shares are held by institutional investors. 50.9% of Nelnet shares are held by insiders. Comparatively, 24.5% of Manhattan Bridge Capital shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Nelnet and Manhattan Bridge Capital, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nelnet	0	2	0	0	2.00
Manhattan Bridge Capital	0	1	0	0	2.00

Nelnet currently has a consensus target price of $135.00, indicating a potential upside of 3.67%. Given Nelnet’s higher possible upside, equities research analysts plainly believe Nelnet is more favorable than Manhattan Bridge Capital.

Valuation and Earnings

This table compares Nelnet and Manhattan Bridge Capital”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nelnet	$2.14 billion	2.19	$184.04 million	$11.90	10.94
Manhattan Bridge Capital	$9.69 million	5.54	$5.59 million	$0.46	10.20

Nelnet has higher revenue and earnings than Manhattan Bridge Capital. Manhattan Bridge Capital is trading at a lower price-to-earnings ratio than Nelnet, indicating that it is currently the more affordable of the two stocks.

Dividends

Nelnet pays an annual dividend of $1.32 per share and has a dividend yield of 1.0%. Manhattan Bridge Capital pays an annual dividend of $0.46 per share and has a dividend yield of 9.8%. Nelnet pays out 11.1% of its earnings in the form of a dividend. Manhattan Bridge Capital pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Manhattan Bridge Capital has increased its dividend for 1 consecutive years. Manhattan Bridge Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Nelnet and Manhattan Bridge Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nelnet	18.96%	12.58%	3.11%
Manhattan Bridge Capital	58.67%	12.22%	8.10%

Volatility & Risk

Nelnet has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, Manhattan Bridge Capital has a beta of 0.27, indicating that its stock price is 73% less volatile than the S&P 500.

Summary

Nelnet beats Manhattan Bridge Capital on 10 of the 15 factors compared between the two stocks.

About Nelnet

Nelnet, Inc. engages in loan servicing, communications, education technology, services, and payment processing businesses worldwide. The Loan Servicing and Systems segment provides loan conversion, application processing, borrower updates, customer service, payment processing, due diligence procedures, funds management reconciliation, and claim processing services. This segment also offers student loan servicing software; business process outsourcing services specialized in contact center management, such as inbound calls, outreach campaigns and sales, and interacting with customers through multi-channels, and processing and technology services. The Education Technology Services and Payments segment provides financial management services; school information system software; website design and cost-effective admissions software; FACTS Giving, a donation platform; and customized professional development and coaching services, educational instruction services, and technology products that aid in teacher and student evaluations. This segment also offers tuition payment plans, and service and technology for student billings, payments, and refunds; solutions for in-person, online, and mobile payment experiences on campus; payment processing services, such as credit card and electronic transfer; faith community, giving, and learning management services and technologies; and an integrated commerce payment platform, financial management, and tuition payment plan services, as well as a school management platform that provides administrative, information and financial management, and communication functions for K-12 schools. The Asset Generation and Management segment acquires, manages, and owns loan assets. The Nelnet Bank segment operates as an internet industrial bank. It also offers investment advisory, insurance, and reinsurance services, as well as engages in real estate investment business. The company was incorporated in 1977 and is headquartered in Lincoln, Nebraska.

About Manhattan Bridge Capital

Manhattan Bridge Capital, Inc., a real estate finance company, originates, services, and manages a portfolio of first mortgage loans in the United States. The company offers short-term, secured, and non-banking loans to real estate investors to fund acquisition, renovation, rehabilitation, or development of residential or commercial properties. Its loans are secured by collateral consisting of real estate and accompanied by personal guarantees from the principals of the borrowers. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was founded in 1989 and is headquartered in Great Neck, New York.