Reviewing NIC (EGOV) and Its Rivals

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for NIC and its peers, as reported by MarketBeat.com.

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 target price of $19.33, suggesting a potential upside of 19.34%. As a group, “Internet Services” companies have a potential upside of 3.69%. Given NIC’s higher possible upside, equities analysts plainly believe NIC is more favorable than its peers.

Earnings & Valuation

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

Gross Revenue Net Income Price/Earnings Ratio
NIC $317.92 million $55.83 million 20.00
NIC Competitors $954.98 million $110.67 million 581.03

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.

Risk and Volatility

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

Insider and Institutional Ownership

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

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%

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 3.5% and pay out 44.4% of their earnings in the form of a dividend.

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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