SLM Corporation Floating Rate Non-Cumulative Preferred Stock Series B (SLMBP)

FairStock Score: 55/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

SLM is a private education lender funding loans partly through deposits. The security here is a floating-rate, non-cumulative preferred, so the dividend is not guaranteed to accrue if skipped. Underlying profits have been positive: FY2025 net income was $744.8M, or $3.46 diluted EPS, up from FY2024 $608.3M and $2.68, and FY2023 $581.4M and $2.41. But the latest reported quarter, fiscal Q2 2026 ended 2026-06-30, showed net income of $58.5M and diluted EPS of $0.29, down from fiscal Q2 2025 net income of $71.3M and EPS of $0.32. FairStock shows ROE 30.33%, ROCE 2.53%, and D/E 2.36. That mix—high ROE, low ROCE, high leverage—looks like a leveraged spread lender, not a wide-moat business. Free cash flow is -$324.6M TTM and FCF yield -6.7%. Piotroski 3/9 and Altman Z 0.37 suggest financial fragility. At the $73.00 close on 2026-10-13, FairStock puts P/E at 33.95, P/B at 6.17, Graham Number at $25.23, and margin of safety at -189.34%. The 7.82% yield is attractive, but non-cumulative. FairStock Score is 55/100; Lynch category is SLOW GROWER — Shrinking: profit -3.3% a year over 5 years. I see an income instrument with credit risk, not a margin-of-safety bargain.

In plain English: SLM makes private student loans and offers deposit accounts. The business is profitable over the year but looks weaker lately, with falling quarterly profit, a lot of debt, and negative cash flow. At $73, the preferred stock pays a high dividend, but that payout looks like compensation for risk rather than a cheap price.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer