Liberty Tax (TAX) vs. The Competition Head-To-Head Analysis

Liberty Tax (NASDAQ: TAX) is one of 304 public companies in the “BUSINESS SERVICES” industry, but how does it weigh in compared to its peers? We will compare Liberty Tax to related companies based on the strength of its risk, profitability, earnings, dividends, analyst recommendations, valuation and institutional ownership.

Dividends

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Liberty Tax pays an annual dividend of $0.64 per share and has a dividend yield of 6.6%. Liberty Tax pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “BUSINESS SERVICES” companies pay a dividend yield of 1.6% and pay out 47.0% of their earnings in the form of a dividend.

Valuation and Earnings

This table compares Liberty Tax and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Liberty Tax $173.99 million $13.01 million 12.19
Liberty Tax Competitors $3.01 billion $232.83 million 31.14

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

Volatility & Risk

Liberty Tax has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500. Comparatively, Liberty Tax’s peers have a beta of 1.01, meaning that their average share price is 1% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Liberty Tax and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Liberty Tax 0 1 0 0 2.00
Liberty Tax Competitors 1128 5276 7878 223 2.50

As a group, “BUSINESS SERVICES” companies have a potential upside of 11.25%. Given Liberty Tax’s peers stronger consensus rating and higher probable upside, analysts plainly believe Liberty Tax has less favorable growth aspects than its peers.

Profitability

This table compares Liberty Tax and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Liberty Tax 7.25% 14.97% 6.66%
Liberty Tax Competitors -158.38% -95.29% -3.28%

Institutional and Insider Ownership

48.0% of Liberty Tax shares are held by institutional investors. Comparatively, 57.5% of shares of all “BUSINESS SERVICES” companies are held by institutional investors. 40.4% of Liberty Tax shares are held by company insiders. Comparatively, 16.1% of shares of all “BUSINESS SERVICES” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Liberty Tax peers beat Liberty Tax on 10 of the 15 factors compared.

Liberty Tax Company Profile

Liberty Tax, Inc. is the holding company for JTH Tax, Inc. The Company is a provider of tax preparation services. The Company provides retail federal and state income tax preparation services and related tax settlement products in the United States and Canada. The Company’s tax preparation services and related tax settlement products are offered primarily through franchised locations. All of the Company’s offices are operated under the Liberty Tax Service and SiempreTax+ brands. The Company also provides an online digital Do-It-Yourself (DIY) tax program in the United States. The Company offers two types of tax settlement financial products: refund transfer products, which include providing a means by which a customer receives his or her refund, and refund-based loans. The Company’s LibTax software allows tax customers to have their federal and state income tax returns filed electronically.

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