Head-To-Head Analysis: NIC (EGOV) versus Booz Allen Hamilton (BAH)

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NIC (NYSE: BAH) and Booz Allen Hamilton (NYSE:BAH) are both computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, risk, valuation, earnings, institutional ownership, analyst recommendations and profitability.

Profitability

This table compares NIC and Booz Allen Hamilton’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NIC 16.52% 33.16% 20.45%
Booz Allen Hamilton 5.21% 57.00% 9.02%

Volatility and Risk

NIC has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, Booz Allen Hamilton has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500.

Insider and Institutional Ownership

94.2% of NIC shares are owned by institutional investors. Comparatively, 94.4% of Booz Allen Hamilton shares are owned by institutional investors. 4.1% of NIC shares are owned by insiders. Comparatively, 3.6% of Booz Allen Hamilton shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NIC $336.51 million 3.21 $51.61 million $0.77 21.10
Booz Allen Hamilton $6.17 billion 1.20 $305.11 million $2.01 25.76

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for NIC and Booz Allen Hamilton, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NIC 0 5 0 0 2.00
Booz Allen Hamilton 0 4 7 0 2.64

NIC currently has a consensus price target of $17.25, suggesting a potential upside of 6.15%. Booz Allen Hamilton has a consensus price target of $46.78, suggesting a potential downside of 9.66%. Given NIC’s higher probable upside, equities analysts clearly believe NIC is more favorable than Booz Allen Hamilton.

Dividends

NIC pays an annual dividend of $0.32 per share and has a dividend yield of 2.0%. Booz Allen Hamilton pays an annual dividend of $0.76 per share and has a dividend yield of 1.5%. NIC pays out 41.6% of its earnings in the form of a dividend. Booz Allen Hamilton pays out 37.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Booz Allen Hamilton has increased its dividend for 5 consecutive years.

Summary

Booz Allen Hamilton beats NIC on 11 of the 17 factors compared between the two stocks.

NIC Company Profile

NIC Inc., together with its subsidiaries, provides digital government services that enable governments to use technology to provide various services to businesses and citizens in the United States. The company's outsourced portal business enters into long-term contracts with state and local governments to design, build, and operate Internet-based and enterprise-wide portals on their behalf. Its portals consist of Websites and applications that enable businesses and citizens to access government information online and secure transactions, such as applying for a permit, retrieving government records, or filing a government-mandated form or report. The company's portal service offerings include motor vehicle driver history record retrieval; vehicle title, lien, and registration; motor vehicle inspections; temporary vehicle tags; driver's license renewal; hunting and fishing licenses; health professional license services; professional license renewal; business registrations and renewals; secretary of state business searches; Uniform Commercial Code (UCC) searches and filings; limited criminal history searches; court services; vital records; income and property tax payments; and payment processing products and services. Its software & services business provides software development and payment processing services to state and local governments, as well as federal agencies. In addition, the company develops and manages the pre-employment screening program for motor carriers using transaction-based business model. Further, it offers consulting, application development, and portal management services to governments. NIC Inc. was founded in 1991 and is based in Olathe, Kansas.

Booz Allen Hamilton Company Profile

Booz Allen Hamilton Holding Corporation provides management and technology consulting, engineering, analytics, digital, mission operations, and cyber solutions to governments, corporations, and not-for-profit organizations in the United States and internationally. The company offers consulting solutions for various domains, business strategies, human capital, and operations. It also provides analytics services, which focuses on delivering transformational solutions in the areas of decision analytics, including operations research and cost estimation; automation; and data science, which include predictive modeling and machine learning, as well as new or emerging areas, such as deep learning and artificial intelligence. In addition, the company delivers engineering services and solutions to define, develop, implement, sustain, and modernize complex physical systems, such as the launch and test range system for the U.S. air force space command or the flush air data systems for NASA; and provides cyber risk management solutions, such as prevention, detection, and cost effectiveness. Further, it offers technical solutions in the areas of cybersecurity, command, control, communications, computers, intelligence, surveillance, and reconnaissance. Booz Allen Hamilton Holding Corporation was founded in 1914 and is headquartered in McLean, Virginia.

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