Critical Contrast: NIC (EGOV) versus Its Peers

NIC (NASDAQ: EGOV) is one of 45 publicly-traded companies in the “Internet Services” industry, but how does it compare to its competitors? We will compare NIC to similar businesses based on the strength of its valuation, analyst recommendations, dividends, institutional ownership, risk, earnings and profitability.

Earnings and Valuation

This table compares NIC and its competitors revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
NIC $317.92 million $55.83 million 20.06
NIC Competitors $991.07 million $116.17 million 664.92

NIC’s competitors have higher revenue and earnings than NIC. NIC is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Insider and Institutional Ownership

90.0% of NIC shares are held by institutional investors. Comparatively, 65.3% of shares of all “Internet Services” companies are held by institutional investors. 4.1% of NIC shares are held by insiders. Comparatively, 20.6% of shares of all “Internet Services” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

NIC has a beta of 0.38, indicating that its stock price is 62% less volatile than the S&P 500. Comparatively, NIC’s competitors have a beta of 1.45, indicating that their average stock price is 45% more volatile than the S&P 500.

Dividends

NIC pays an annual dividend of $0.32 per share and has a dividend yield of 2.0%. NIC pays out 39.5% of its earnings in the form of a dividend. As a group, “Internet Services” companies pay a dividend yield of 3.3% and pay out 45.5% of their earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current recommendations and price targets for NIC and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NIC 1 5 1 0 2.00
NIC Competitors 413 1615 2729 91 2.52

NIC presently has a consensus price target of $19.33, suggesting a potential upside of 18.97%. As a group, “Internet Services” companies have a potential upside of 3.35%. Given NIC’s higher probable upside, analysts clearly believe NIC is more favorable than its competitors.

Profitability

This table compares NIC and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NIC 16.42% 36.89% 22.03%
NIC Competitors 2.28% 44.29% 8.94%

Summary

NIC competitors beat NIC on 10 of the 15 factors compared.

About NIC

NIC Inc. is a provider of digital government services that help governments use technology to provide services to businesses and citizens. The Company operates through Outsourced Portals segment. The Company offers its services through two channels: primary outsourced portal businesses, and software and services businesses. In the primary outsourced portal businesses, the Company enters into contracts with state and local governments to design, build, and operate Internet-based, enterprise-wide portals on their behalf. Its software and services businesses include its subsidiaries that provide software development and payment processing services, other than outsourced portal services, to state and local governments, as well as federal agencies. The Company’s outsourced portal businesses include interactive government services (IGS), driver history records (DHR), Portal software development and services, and Portal management.

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