Liberty Tax Service (NASDAQ: TAX) and Finjan (NASDAQ:FNJN) are both small-cap business services companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, analyst recommendations, profitability, dividends, institutional ownership and risk.

Valuation & Earnings

This table compares Liberty Tax Service and Finjan’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Liberty Tax Service $173.99 million 0.77 $13.01 million $1.15 9.09
Finjan $50.48 million 1.58 $22.81 million $0.35 8.23

Finjan has lower revenue, but higher earnings than Liberty Tax Service. Finjan is trading at a lower price-to-earnings ratio than Liberty Tax Service, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

46.4% of Liberty Tax Service shares are owned by institutional investors. Comparatively, 35.8% of Finjan shares are owned by institutional investors. 40.4% of Liberty Tax Service shares are owned by insiders. Comparatively, 9.6% of Finjan shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Liberty Tax Service has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500. Comparatively, Finjan has a beta of -0.6, meaning that its stock price is 160% less volatile than the S&P 500.

Dividends

Liberty Tax Service pays an annual dividend of $0.64 per share and has a dividend yield of 6.1%. Finjan does not pay a dividend. Liberty Tax Service pays out 55.7% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current ratings for Liberty Tax Service and Finjan, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Liberty Tax Service 0 1 0 0 2.00
Finjan 0 0 1 0 3.00

Finjan has a consensus price target of $5.00, indicating a potential upside of 73.61%. Given Finjan’s stronger consensus rating and higher probable upside, analysts plainly believe Finjan is more favorable than Liberty Tax Service.

Profitability

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

Net Margins Return on Equity Return on Assets
Liberty Tax Service N/A N/A N/A
Finjan N/A 95.86% 47.19%

Summary

Finjan beats Liberty Tax Service on 8 of the 15 factors compared between the two stocks.

Liberty Tax Service Company Profile

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.

Finjan Company Profile

Finjan Holdings, Inc., a cybersecurity company, provides intellectual property licensing and enforcement services in the United States and internationally. The company owns a portfolio of patents related to software and hardware technologies that proactively detect malicious code and thereby protects end users from identity and data theft, spyware, malware, phishing, Trojans, and other Web and network threats. Its patented technologies are used in specific cybersecurity technology areas, including endpoint/cloud software, Web gateway/Internet infrastructure, networking equipment markets, and mobile security. The company's technology scans and repels the latest and unknown threats to network, Web, and endpoint devices on a real-time basis. It also develops mobile security applications; invests in cybersecurity technologies and intellectual property; and provides cyber risk and cyber security advisory services provides. Finjan Holdings, Inc. was founded in 1997 and is headquartered in East Palo Alto, California.

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