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

Volatility and Risk

NIC has a beta of 0.38, indicating that its share price is 62% less volatile than the S&P 500. Comparatively, NIC’s rivals have a beta of 1.41, indicating that their average share price is 41% more volatile than the S&P 500.

Profitability

This table compares NIC and its rivals’ 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 0.94% 39.80% 7.80%

Insider & Institutional Ownership

93.3% of NIC shares are held by institutional investors. Comparatively, 66.0% of shares of all “Internet Services” companies are held by institutional investors. 4.1% of NIC shares are held by insiders. Comparatively, 21.1% of shares of all “Internet Services” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NIC 1 5 1 0 2.00
NIC Competitors 415 1575 2666 91 2.51

NIC presently has a consensus price target of $19.33, suggesting a potential upside of 18.25%. As a group, “Internet Services” companies have a potential upside of 1.96%. Given NIC’s higher probable upside, equities research analysts clearly believe NIC is more favorable than its rivals.

Earnings and Valuation

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

Gross Revenue Net Income Price/Earnings Ratio
NIC $317.92 million $55.83 million 20.19
NIC Competitors $954.98 million $110.67 million 637.04

NIC’s rivals have higher revenue and earnings than NIC. NIC is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

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 3.3% and pay out 45.5% of their earnings in the form of a dividend.

Summary

NIC rivals beat NIC on 10 of the 15 factors compared.

About NIC

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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