Liberty Tax Service (TAX) and Its Peers Critical Review

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

Volatility and Risk

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Liberty Tax Service has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500. Comparatively, Liberty Tax Service’s peers have a beta of 1.82, meaning that their average share price is 82% more 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 6.4%. 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.

Valuation and Earnings

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

Gross Revenue Net Income Price/Earnings Ratio
Liberty Tax Service $173.99 million $13.01 million 8.74
Liberty Tax Service Competitors $172.04 million $8.49 million 5.68

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Liberty Tax Service and its peers, as reported 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 70 279 573 9 2.56

As a group, “Patent owners & lessors” companies have a potential upside of 13.78%. Given Liberty Tax Service’s peers stronger consensus rating and higher possible upside, analysts clearly believe Liberty Tax Service has less favorable growth aspects than its peers.

Institutional & Insider Ownership

48.0% of Liberty Tax Service shares are held by institutional investors. Comparatively, 35.4% of shares of all “Patent owners & lessors” companies are held by institutional investors. 40.4% of Liberty Tax Service shares are held by insiders. Comparatively, 19.6% of shares of all “Patent owners & lessors” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Liberty Tax Service and its peers’ 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 peers on 9 of the 15 factors compared.

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.

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