Netflix (NFLX) vs. NIC (EGOV) Critical Comparison
Netflix (NASDAQ: NFLX) and NIC (NASDAQ:EGOV) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, analyst recommendations, earnings and valuation.
NIC pays an annual dividend of $0.32 per share and has a dividend yield of 1.9%. Netflix does not pay a dividend. NIC pays out 38.1% of its earnings in the form of a dividend.
This is a breakdown of current ratings and recommmendations for Netflix and NIC, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Netflix presently has a consensus price target of $206.18, suggesting a potential upside of 5.62%. NIC has a consensus price target of $19.33, suggesting a potential upside of 13.73%. Given NIC’s higher probable upside, analysts clearly believe NIC is more favorable than Netflix.
This table compares Netflix and NIC’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider & Institutional Ownership
81.0% of Netflix shares are held by institutional investors. Comparatively, 92.9% of NIC shares are held by institutional investors. 4.9% of Netflix shares are held by insiders. Comparatively, 4.1% of NIC shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Volatility and Risk
Netflix has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500. Comparatively, NIC has a beta of 0.41, suggesting that its share price is 59% less volatile than the S&P 500.
Earnings and Valuation
This table compares Netflix and NIC’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Netflix||$10.88 billion||7.76||$814.34 million||$0.99||197.18|
|NIC||$327.22 million||3.44||$83.34 million||$0.84||20.24|
Netflix has higher revenue and earnings than NIC. NIC is trading at a lower price-to-earnings ratio than Netflix, indicating that it is currently the more affordable of the two stocks.
Netflix beats NIC on 10 of the 16 factors compared between the two stocks.
Netflix, Inc. is a provider an Internet television network. The Company operates through three segments: Domestic streaming, International streaming and Domestic DVD. The Domestic streaming segment includes services that streams content to its members in the United States. The International streaming segment includes services that streams content to its members outside the United States. The Domestic DVD segment includes services, such as digital optical disc (DVD)-by-mail. The Company’s members can watch original series, documentaries, feature films, as well as television shows and movies directly on their Internet-connected screen, televisions, computers and mobile devices. It offers its streaming services both domestically and internationally. In the United States, its members can receive DVDs delivered to their homes. The Company had members streaming in over 190 countries, as of December 31, 2016.
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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