OneMain Holdings Inc. (OMF) — Reasonably Priced With Tenuous Growth Prospects

OneMain shares moved -20.1% over the last 52 weeks, with a high of $50.8 and a low of $28.77. During this time, the stock lagged the S&P 500 index by -14.0%. As of April 2023, the company's 50-day average price is $39.94. OneMain Holdings, Inc., a financial service holding company, engages in the consumer finance and insurance businesses. The mid-cap Finance company has 9,200 full time employees and is based in Evansville, IN. OneMain has returned a 10.1% dividend yield over the last 12 months.

EPS Trend Sustained Primarily by Reducing the Number of Shares Outstanding:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue $3,814,000 $3,906,000 $4,036,000 $4,199,000
Net Income $855,000 $730,000 $1,314,000 $878,000
Net Margins 22.42% 18.69% 32.56% 20.91%
Earnings Per Share $6.27 $5.41 $9.87 $7.06
Diluted Shares 136,327 134,919 133,054 120,812
Free Cash Flow $2,362,000 $2,212,000 $2,247,000 $2,387,000
Long Term Debt $17,212,000 $17,800,000 $17,750,000 $18,281,000
Net Debt / EBITDA 3.53 3.39 3.17 3.58

OneMain Is Reasonably Priced:

Compared to the Finance sector's average of 14.34, OneMain has a trailing twelve month P/E ratio of 5.7 and, according to its EPS guidance of $7.67, an expected P/E ratio of 5.2. OneMain's PEG ratio is 1.38 based on its 4.1% compound average growth rate of historical and projected earnings per share. This implies that the company's shares are fairly valued. The market is giving OneMain a fair value in terms of its book value since its P/B ratio of 1.5 is lower than the sector average, which stands at 1.57. As of the date of publication, the company's shares are trading -40.5% below their Graham number of $63.45.

There's an Analyst Consensus of Strong Upside Potential for OneMain:

13 analysts are following OneMain and have set target prices ranging from $41.0 to $62.0 per share. On average, they have given the company a rating of buy. At the current price of $39.94, OMF is trading -23.4% away from its average analyst target price of $52.15 per share, implying an analyst consensus of strong upside potential for the stock. The company has an average amount of shares sold short since 3.4% of the company's shares are tied to short positions. Institutions own 92.5% of OneMain's shares, while the insider ownership rate stands at 4.54%. which is a decent amount of insider shareholders. The company's biggest shareholder is the Vanguard Group, Inc. with a 10% stake in the company worth $454,626,082.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.