NIC (NASDAQ: EGOV) and Blucora (NASDAQ:BCOR) are both small-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, earnings, risk, analyst recommendations, valuation and institutional ownership.

Dividends

NIC pays an annual dividend of $0.32 per share and has a dividend yield of 2.0%. Blucora does not pay a dividend. NIC pays out 38.1% of its earnings in the form of a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
NIC 17.31% 38.37% 23.00%
Blucora -8.03% 11.92% 5.43%

Institutional & Insider Ownership

92.6% of NIC shares are owned by institutional investors. Comparatively, 84.5% of Blucora shares are owned by institutional investors. 4.1% of NIC shares are owned by insiders. Comparatively, 14.1% of Blucora shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NIC $327.22 million 3.29 $83.34 million $0.84 19.35
Blucora $491.58 million 2.08 $92.46 million ($1.02) -22.30

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

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NIC 1 5 1 0 2.00
Blucora 0 1 3 0 2.75

NIC currently has a consensus price target of $19.67, indicating a potential upside of 21.03%. Blucora has a consensus price target of $25.33, indicating a potential upside of 11.36%. Given NIC’s higher probable upside, analysts plainly believe NIC is more favorable than Blucora.

Risk and Volatility

NIC has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500. Comparatively, Blucora has a beta of -0.18, meaning that its stock price is 118% less volatile than the S&P 500.

Summary

NIC beats Blucora on 10 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.

Blucora Company Profile

Blucora, Inc. is a provider of technology-enabled financial solutions to consumers, small business owners and tax professionals. The Company operates through the Wealth Management and Tax Preparation segments. The Company’s Wealth Management segment consists of HD Vest, which provides financial advisors with an integrated platform of brokerage, investment advisory and insurance services to assist in making each financial advisor a financial service center for his/her clients The Company’s Tax Preparation segment provides digital do-it-yourself (DDIY) tax preparation solutions for consumers, small business owners and tax professionals. TaxAct, a provider of digital tax preparation solutions. HD Vest’s specialized model provides an open-architecture investment platform and technology tools to help financial advisors identify investment opportunities for their clients. TaxAct offers pricing and packaging options for tax professionals.

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