Nelnet (NNI): Quietly Compounding Year After Year

This is a quick update and business overview on one of my favorite “own it forever” names, a company that just keeps executing and compounding year after year.

For anyone unfamiliar, Nelnet is a boring compounder with owner-operators who think in decades. They run tight businesses, keep costs in line, and allocate capital with discipline.

Over time that shows up in book value per share, buybacks, and a steady dividend. Since 2005, book value per share has grown at roughly ~11% a year, while total shares outstanding have shrunk by about a third.

The news this week is another brick in that wall. Nelnet and its subsidiary, Nelnet Canada, agreed to acquire Finastra’s Canadian student loan servicing business from DH Corporation, a Finastra subsidiary for a purchase price of $93 million in cash.