Critical Review: NIC (EGOV) versus Cartesian (CRTN)

NIC (NASDAQ:EGOV) and Cartesian (OTCMKTS:CRTN) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NIC 0 3 0 0 2.00
Cartesian 0 0 0 0 N/A

NIC presently has a consensus price target of $15.50, suggesting a potential upside of 26.22%.

Profitability

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

Net Margins Return on Equity Return on Assets
NIC 16.94% 32.21% 20.19%
Cartesian -15.30% -386.24% -33.67%

Institutional and Insider Ownership

89.4% of NIC shares are owned by institutional investors. 4.1% of NIC shares are owned by company insiders. Comparatively, 9.5% of Cartesian shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

NIC pays an annual dividend of $0.32 per share and has a dividend yield of 2.6%. Cartesian does not pay a dividend. NIC pays out 41.6% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares NIC and Cartesian’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NIC $336.51 million 2.43 $51.61 million $0.77 15.95
Cartesian $50.77 million 0.00 -$6.24 million N/A N/A

NIC has higher revenue and earnings than Cartesian.

Volatility & Risk

NIC has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500. Comparatively, Cartesian has a beta of -0.57, suggesting that its stock price is 157% less volatile than the S&P 500.

Summary

NIC beats Cartesian on 8 of the 10 factors compared between the two stocks.

About NIC

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.

About Cartesian

Cartesian, Inc., a management consulting company, provides consulting services and managed solutions to communications, digital media, and technology sectors in the United States, the United Kingdom, and Western Europe. It provides technical consultancy services in the areas of requirements definition and capture; data analysis; selecting and implementing mediation; provisioning; customer and inter-operator billing; integration systems to provide resilient automated processes; migrating end-customer products; customers and networks; planning, managing, and executing end-to-end systems; and software testing. The company also offers strategy and business case development services, including business case development, data and content strategies, marketing spending optimization, service and brand diversification, enterprise and small business strategies, technology commercialization, and operational strategies; and marketing services. In addition, it offers program management services; business and operations process redesign and reengineering services; and Ascertain, a revenue management and data integrity toolset that provides evaluation of processes, metrics, and control points. Further, the company provides investment advisory services, such as evaluation of management teams and business plans, and identification of strengths and weakness of the company, as well as analyses of the company's financial models, systems, products, and operational and business processes. It serves wireless and wireline service providers, and cable multiple systems operators, as well as technology companies, media and entertainment companies, and financial services firms that invest in the communications industry. The company was formerly known as The Management Network Group, Inc. and changed its name to Cartesian, Inc. in June 2014. Cartesian, Inc. was founded in 1990 and is based in Overland Park, Kansas.

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