OneMain Holdings, Inc. (NYSE: OMF)

Sector: Financial Services Industry: Credit Services CIK: 0001584207
Market Cap 8.13 Bn
P/B 2.41
P/E 11.54
P/S 2.90
ROIC (Qtr) 2.71
Div Yield % 7.63
Rev 1y % (Qtr) 14.75
Total Debt (Qtr) 22.34 Bn
Debt/Equity (Qtr) 6.61

About

OneMain Holdings, Inc. (OMF) operates in the consumer finance industry, providing responsible access to credit for nonprime consumers. The company's main business activities involve originating and servicing unsecured and secured personal loans, offering credit cards, and providing optional credit and non-credit insurance products. OneMain's operations span across the United States and Canada, with a significant presence in both countries. The company generates revenue through a variety of products and services, primarily catering to the needs...

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Price action

Investment thesis

Bull case

  • Operating cash flow of 3.02B provides strong 86.26x coverage of stock compensation 35M, indicating sustainable incentive practices.
  • Strong operating cash flow of 3.02B provides 3.31x coverage of SG&A expenses 912M, showing efficient operational cost management.
  • Operating cash flow of 3.02B provides strong 3.87x coverage of operating expenses 780M, showing operational efficiency.
  • Operating cash flow of 3.02B provides strong 71.88x coverage of tax liabilities 42M, showing excellent fiscal position.
  • Retained earnings of 2.50B represent substantial 0.74x of equity 3.38B, indicating strong internal capital generation.

Bear case

  • Operating cash flow of 3.02B barely covers its investment activities of (3.38B), with a coverage ratio of -0.89, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 3.02B provides thin coverage of dividend payments of (501M) with a -6.03 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Retained earnings of 2.50B provide limited buffer against comprehensive income items of (47M), which is -53.19x, indicating elevated exposure to market risks.
  • Operating cash flow of 3.02B is outpaced by equity issuance of (69M) (-43.75 ratio), indicating concerning reliance on equity markets for funding operations.
  • Tax assets of 0 provide limited offset against tax liabilities of 42M, which is 0x, indicating potential future cash flow pressure from tax obligations.

Peer comparison

Companies in the Credit Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 V Visa Inc. 685.45 Bn 34.17 17.14 25.17 Bn
2 MA Mastercard Inc 520.38 Bn 36.52 16.53 18.98 Bn
3 AXP American Express Co 266.36 Bn 25.27 4.08 59.23 Bn
4 COF Capital One Financial Corp 111.93 Bn 102.41 3.87 51.48 Bn
5 PYPL PayPal Holdings, Inc. 58.35 Bn 11.87 1.78 11.28 Bn
6 SYF Synchrony Financial 32.00 Bn 9.16 3.32 14.43 Bn
7 SOFI SoFi Technologies, Inc. 29.56 Bn 46.17 8.90 2.81 Bn
8 ALLY Ally Financial Inc. 14.44 Bn 52.52 1.83 20.63 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.06 1.03
EV to Cash from Ops. EV/CFO 9.50 4.72
EV to Debt EV to Debt 1.28 2.99
EV to EBIT EV/EBIT 31.31 -246.63
EV to EBITDA EV/EBITDA 23.90 -62.30
EV to Free Cash Flow [EV/FCF] EV/FCF 9.50 7.33
EV to Market Cap EV to Market Cap 3.53 10.21
EV to Revenue EV/Rev 10.21 10.01
Price to Book Value [P/B] P/B 2.41 3.47
Price to Earnings [P/E] P/E 11.54 13.86
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.41 1.59
Dividend Payout Ratio % Div Payout % (Qtr) 70.30 2.22
Dividend per Basic Share Div per Share (Qtr) 4.16 0.68
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 16.36 4.82
Interest Coverage Interest Coverage 0.00 -64.96
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex Growth (1y) % 0.00 -85.80
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 10.71 7.91
Dividend Growth (1y) % Div 1y % (Qtr) 1.96 5.47
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 28.65 16.85
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 20.36 -0.69
EBIT Growth (1y) % EBIT 1y % (Qtr) 26.52 33.67
EBT Growth (1y) % EBT 1y % (Qtr) 26.52 1.73
EPS Growth (1y) % EPS 1y % (Qtr) 29.26 -64.54
FCF Growth (1y) % FCF 1y % (Qtr) 15.01 129.37
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 14.14 18.73
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.10 0.23
Cash Payout Ratio Cash Payout (Qtr) 0.17 0.05
Cash Ratio Cash Ratio 0.00 0.46
Current Ratio Current Ratio 0.00 1.05
Debt to Equity Ratio Debt/Equity (Qtr) 6.61 4.88
Interest Cover Ratio Interest Cover Ratio 0.00 -64.96
Times Interest Earned Times Interest Earned 0.00 -64.96
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 42.70 -17.83
EBIT Margin % EBIT Margin % (Qtr) 32.62 125.65
EBT Margin % EBT Margin % (Qtr) 32.62 -9.92
Gross Margin % Gross Margin % (Qtr) 92.90 72.34
Net Profit Margin % Net Margin % (Qtr) 25.10 -23.76