Is It Wise To Hold On To Navient (NAVI) Stock Right Now?

Navient Corporation (NASDAQ:NAVI) continues to benefit from its strong position in the educational loan industry. Further, its inorganic growth strategies and improving economic conditions shall bolster its performance. However, higher expenses remain a concern.

Navient’s shares have gained 26.5% over the last one year, outperforming the Zacks categorized Financial - Consumer Loans industry’s rally of 20.6%.

The Zacks Consensus Estimate for Navient’s current-year earnings remained stable in the last 30 days. As a result, the stock currently carries a Zacks Rank #3 (Hold).

After separation from SLM Corporation (NASDAQ:SLM) in Apr 2014, Navient has become the leading servicer of education loans. It services over $300 billion in student loans for more than 12 million customers. Further, declining unemployment rate, lesser regulatory hurdles due to the approval of Financial Choice Act and specialized focus on operations will likely boost the company’s performance.

Further, Navient’s inorganic growth strategies to expand its asset recovery and business process outsourcing operations in the health care payment sector are encouraging. In Oct 2015 it acquired Xtend Healthcare and, in Feb 2015, it announced the acquisition of Gila LLC, an asset recovery and business process outsourcing firm. Moreover, in Apr 2017, Navient entered into a deal with JPMorgan Chase (NYSE:JPM) to acquire the educational loan portfolio, which management expects will contribute approximately 9 cents per share to its 2017 earnings.

Nevertheless, increasing expenses remains a headwind for Navient. Several litigations issues and strict regulatory scrutiny over alleged anti-consumer practices in the U.S. student loan industry are likely to affect the company’s financials.

Stock to Consider

A better-ranked stock in the industry is World Acceptance Corporation (NASDAQ:WRLD) sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for the company’s current-year earnings has been revised 24.5% upward over the last 60 days. Further, its shares have gained 52.9% in the last one year.

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