Critical Survey: Liberty Tax Service (TAX) vs. The Competition

Liberty Tax Service (NASDAQ: TAX) is one of 24 public companies in the “Patent owners & lessors” industry, but how does it compare to its rivals? We will compare Liberty Tax Service to similar companies based on the strength of its dividends, analyst recommendations, risk, earnings, institutional ownership, valuation and profitability.

Dividends

Liberty Tax Service pays an annual dividend of $0.64 per share and has a dividend yield of 6.3%. Liberty Tax Service pays out 55.7% of its earnings in the form of a dividend. As a group, “Patent owners & lessors” companies pay a dividend yield of 2.0% and pay out 31.5% of their earnings in the form of a dividend.



Volatility and Risk

Liberty Tax Service has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500. Comparatively, Liberty Tax Service’s rivals have a beta of 1.82, meaning that their average share price is 82% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Liberty Tax Service and its rivals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Liberty Tax Service 0 1 0 0 2.00
Liberty Tax Service Competitors 70 278 572 9 2.56

As a group, “Patent owners & lessors” companies have a potential upside of 14.61%. Given Liberty Tax Service’s rivals stronger consensus rating and higher probable upside, analysts plainly believe Liberty Tax Service has less favorable growth aspects than its rivals.

Earnings and Valuation

This table compares Liberty Tax Service and its rivals top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Liberty Tax Service $173.99 million $13.01 million 8.83
Liberty Tax Service Competitors $172.04 million $8.49 million 5.53

Liberty Tax Service has higher revenue and earnings than its rivals. Liberty Tax Service is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Institutional and Insider Ownership

48.0% of Liberty Tax Service shares are owned by institutional investors. Comparatively, 35.5% of shares of all “Patent owners & lessors” companies are owned by institutional investors. 40.4% of Liberty Tax Service shares are owned by company insiders. Comparatively, 19.5% of shares of all “Patent owners & lessors” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Liberty Tax Service 7.25% 14.97% 6.66%
Liberty Tax Service Competitors -139.67% -94.16% -61.27%

Summary

Liberty Tax Service beats its rivals on 9 of the 15 factors compared.

About Liberty Tax Service

Liberty Tax, Inc., together with its subsidiaries, provides tax preparation services and solutions in the United States and Canada. The company also facilitates refund-based tax settlement financial products, such as refund transfer products, refund-based loans, and personal income tax refund discounting, as well as provides an online digital Do-It-Yourself tax program in the United States. Its customers include taxpayers who, for reasons of complexity, convenience, or the need for prompt tax refunds, seek assisted tax preparation services. Liberty Tax, Inc. offers its products and services through a network of company-owned offices and franchised locations under the Liberty Tax, Liberty Tax Service, Liberty Income Tax, Liberty Canada, and SiempreTax+ brand names. The company was formerly known as JTH Holding, Inc. and changed its name to Liberty Tax, Inc. in July 2014. Liberty Tax, Inc. was founded in 1996 and is headquartered in Virginia Beach, Virginia.

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