Head-To-Head Review: NIC (EGOV) & Its Competitors

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

Dividends

NIC pays an annual dividend of $0.32 per share and has a dividend yield of 1.9%. 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 3.5% and pay out 44.4% of their earnings in the form of a dividend.

Profitability

This table compares NIC and its peers’ 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 2.37% 44.34% 8.92%

Volatility and Risk

NIC has a beta of 0.38, indicating that its stock price is 62% less volatile than the S&P 500. Comparatively, NIC’s peers have a beta of 1.13, indicating that their average stock price is 13% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings for NIC and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NIC 1 5 1 0 2.00
NIC Competitors 417 1628 2732 93 2.51

NIC presently has a consensus price target of $19.33, indicating a potential upside of 16.82%. As a group, “Internet Services” companies have a potential upside of 3.70%. Given NIC’s higher possible upside, analysts plainly believe NIC is more favorable than its peers.

Insider and Institutional Ownership

93.3% of NIC shares are held by institutional investors. Comparatively, 73.6% of shares of all “Internet Services” companies are held by institutional investors. 4.1% of NIC shares are held by insiders. Comparatively, 20.9% of shares of all “Internet Services” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares NIC and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
NIC $317.92 million $55.83 million 20.43
NIC Competitors $954.98 million $110.67 million 581.88

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

Summary

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

NIC Company Profile

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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