Head to Head Comparison: NIC (EGOV) versus Netflix (NFLX)

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

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NIC $327.22 million 3.48 $83.34 million $0.84 20.48
Netflix $10.19 billion 8.45 $706.92 million $0.99 201.49

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.

Profitability

This table compares NIC and Netflix’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%
Netflix 4.04% 15.06% 2.97%

Dividends

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.

Insider & Institutional Ownership

92.9% of NIC shares are held by institutional investors. Comparatively, 81.0% of Netflix shares are held by institutional investors. 4.1% of NIC shares are held by insiders. Comparatively, 4.9% of Netflix shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility & Risk

NIC has a beta of 0.41, suggesting that its share price is 59% less volatile than the S&P 500. Comparatively, Netflix has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for NIC and Netflix, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NIC 1 5 1 0 2.00
Netflix 3 15 31 0 2.57

NIC currently has a consensus target price of $19.33, suggesting a potential upside of 12.40%. Netflix has a consensus target price of $198.00, suggesting a potential downside of 0.74%. Given NIC’s higher probable upside, equities analysts clearly believe NIC is more favorable than Netflix.

Summary

Netflix beats NIC 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.

Netflix Company Profile

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.

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