Reviewing NIC (EGOV) & Its Peers

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

Risk and Volatility

NIC has a beta of 0.38, meaning that its stock price is 62% less volatile than the S&P 500. Comparatively, NIC’s peers have a beta of 1.11, meaning that their average stock price is 11% more volatile than the S&P 500.

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 2.15% 38.17% 7.66%

Dividends

NIC pays an annual dividend of $0.32 per share and has a dividend yield of 1.8%. NIC pays out 39.0% of its earnings in the form of a dividend. As a group, “Internet Services” companies pay a dividend yield of 3.1% and pay out 43.7% of their earnings in the form of a dividend.

Insider and Institutional Ownership

93.2% 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 large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

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

Gross Revenue Net Income Price/Earnings Ratio
NIC $317.92 million $55.83 million 21.16
NIC Competitors $943.06 million $113.10 million 543.77

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.

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NIC 1 4 1 0 2.00
NIC Competitors 434 1664 2792 95 2.51

NIC presently has a consensus target price of $19.33, indicating a potential upside of 11.43%. As a group, “Internet Services” companies have a potential downside of 4.71%. Given NIC’s higher possible upside, research analysts clearly believe NIC is more favorable than its peers.

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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