Head to Head Survey: 58.com (WUBA) versus NIC (EGOV)

58.com (NYSE: WUBA) and NIC (NASDAQ:EGOV) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, earnings, analyst recommendations, valuation and risk.

Dividends

NIC pays an annual dividend of $0.32 per share and has a dividend yield of 2.5%. 58.com does not pay a dividend. NIC pays out 41.6% of its earnings in the form of a dividend.

Institutional and Insider Ownership

60.8% of 58.com shares are held by institutional investors. Comparatively, 92.3% of NIC shares are held by institutional investors. 4.1% of NIC shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares 58.com and NIC’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
58.com $1.14 billion 9.39 -$110.71 million $0.74 98.92
NIC $336.51 million 2.56 $51.61 million $0.77 16.88

NIC has lower revenue, but higher earnings than 58.com. NIC is trading at a lower price-to-earnings ratio than 58.com, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares 58.com and NIC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
58.com 7.93% 4.08% 2.80%
NIC 15.34% 33.25% 19.91%

Risk and Volatility

58.com has a beta of 2.13, suggesting that its stock price is 113% more volatile than the S&P 500. Comparatively, NIC has a beta of 0.38, suggesting that its stock price is 62% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for 58.com and NIC, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
58.com 2 2 5 0 2.33
NIC 0 4 1 0 2.20

58.com presently has a consensus price target of $50.63, suggesting a potential downside of 30.84%. NIC has a consensus price target of $18.00, suggesting a potential upside of 38.46%. Given NIC’s higher probable upside, analysts clearly believe NIC is more favorable than 58.com.

Summary

NIC beats 58.com on 9 of the 16 factors compared between the two stocks.

58.com Company Profile

58.com Inc. is a holding company. The Company’s business consists of its online classifieds and listing platforms. Its online classifieds and listings platforms enable local merchants and consumers to connect, share information and conduct business in China. These platforms include 58, Ganji and Anjuke. 58 and Ganji are online multi-content category-classified advertising platforms, while Anjuke is an online real estate listing platform. In addition, 58 Daojia Inc., its subsidiary, operates a mobile-based closed-loop transactional platform for home services, which directly connects consumers and individual service providers for local services, such as home cleaning, moving services and manicure services provided at home. Its classifieds and listing platforms contain local information for over 480 cities across various content categories, including jobs, real estate, used goods, automotive and yellow pages. It also offers membership, online marketing services and e-commerce services.

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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