NIC (NASDAQ: EGOV) and CoStar Group (NASDAQ:CSGP) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitabiliy, earnings, dividends, analyst recommendations, institutional ownership, risk and valuation.

Valuation & Earnings

This table compares NIC and CoStar Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NIC $322.70 million 3.83 $84.01 million $0.85 21.94
CoStar Group $864.44 million 10.26 $222.21 million $2.79 97.06

CoStar Group has higher revenue and earnings than NIC. NIC is trading at a lower price-to-earnings ratio than CoStar Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares NIC and CoStar Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NIC 17.64% 39.07% 23.37%
CoStar Group 10.47% 7.23% 5.48%

Analyst Recommendations

This is a breakdown of current ratings and price targets for NIC and CoStar Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NIC 1 5 1 0 2.00
CoStar Group 0 0 7 0 3.00

NIC currently has a consensus price target of $22.33, suggesting a potential upside of 19.75%. CoStar Group has a consensus price target of $269.17, suggesting a potential downside of 0.60%. Given NIC’s higher probable upside, equities analysts clearly believe NIC is more favorable than CoStar Group.

Insider and Institutional Ownership

92.9% of NIC shares are owned by institutional investors. 4.1% of NIC shares are owned by insiders. Comparatively, 3.0% of CoStar Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

NIC pays an annual dividend of $0.32 per share and has a dividend yield of 1.7%. CoStar Group does not pay a dividend. NIC pays out 37.6% of its earnings in the form of a dividend.

Risk & Volatility

NIC has a beta of 0.45, suggesting that its stock price is 55% less volatile than the S&P 500. Comparatively, CoStar Group has a beta of 1.51, suggesting that its stock price is 51% more volatile than the S&P 500.

Summary

CoStar Group beats NIC on 9 of the 16 factors compared between the two stocks.

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.

CoStar Group Company Profile

CoStar Group, Inc. (CoStar) is a provider of information, analytics and online marketplaces to the commercial real estate and related business community through its database of commercial real estate information covering the United States, the United Kingdom, and parts of Canada, Spain, Germany and France. The Company provides online marketplaces for commercial real estate, apartment rentals, lands for sale and businesses for sale. It manages its business geographically in two segments: North America, which includes the United States and Canada, and International, which includes the United Kingdom, Spain, Germany and France. Its suite of information, analytics and online marketplaces is branded and marketed to its customers. Its services are primarily derived from a database of building-specific information and offer customers specialized tools for accessing, analyzing and using its information. It has five brands: CoStar, LoopNet, Apartments.com, BizBuySell and LandsofAmerica.

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