Douglas H. Shulman, President and CEO of OneMain Holdings, Inc. (NYSE:OMF), recently sold 5,000 shares of common stock, according to a filing with the Securities and Exchange Commission. The shares were sold at a price of $53 each, amounting to a total transaction value of $265,000. This sale was conducted as part of a pre-established Rule 10b5-1 trading plan, which was set up by Shulman on May 8, 2024. Following this transaction, Shulman retains ownership of 412,474 shares in the company.
In other recent news, OneMain Holdings reported stronger than expected third-quarter performance, with adjusted earnings per share (EPS) of $1.26, surpassing the consensus estimate of $1.14. The earnings beat was attributed to an improvement in asset yield and robust origination volumes that reached $3.7 billion. Compass Point subsequently raised its price target for OneMain from $60 to $63, maintaining a 'Buy' rating on the stock.
OneMain's net charge-offs (NCOs) were reported at 7.33%, and the company experienced improved delinquency trends. Management projected an improvement in NCO trends going into 2025, which is expected to enhance capital generation. OneMain's total revenue rose to $1.5 billion, an 8% increase from the same quarter the previous year, and loan originations also saw a 13% rise.
In other company news, OneMain successfully issued $750 million in unsecured social bonds and made progress in integrating its recent acquisition, Foursight. The company's prospects are further bolstered by an attractive dividend yield of approximately 8%, which is projected to facilitate significant growth capital and the ability to reduce debt in the fiscal years 2025 and 2026. OneMain's shares are considered to offer a compelling total return at current levels and are expected to continue their outperformance.
InvestingPro Insights
While Douglas H. Shulman's recent stock sale might raise eyebrows, a closer look at OneMain Holdings' financials and market performance reveals a more nuanced picture. According to InvestingPro data, OneMain Holdings boasts a market capitalization of $5.95 billion and a price-to-earnings ratio of 10.86, suggesting the stock may be undervalued compared to its peers.
One of the standout features of OneMain Holdings is its impressive dividend yield of 8.38%, as reported by InvestingPro. This aligns with an InvestingPro Tip highlighting that the company "pays a significant dividend to shareholders." For income-focused investors, this high yield could be particularly attractive in the current market environment.
Despite recent revenue challenges, with a slight decline of 2.58% in the last twelve months, OneMain Holdings maintains a robust gross profit margin of 92.37%. This indicates the company's ability to efficiently manage its core operations even in the face of top-line pressures.
An InvestingPro Tip notes that OneMain Holdings has demonstrated a "strong return over the last five years." This is corroborated by the impressive one-year price total return of 49.63%, suggesting that the company has been rewarding for long-term investors.
It's worth noting that InvestingPro offers additional insights, with 6 more tips available for OneMain Holdings. These could provide further context to Shulman's stock sale and the company's overall financial health.
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