Reviewing Wolters Kluwer (OTCMKTS:WOLTF) & LegalZoom.com (NASDAQ:LZ)

Wolters Kluwer (OTCMKTS:WOLTF) and LegalZoom.com (NASDAQ:LZ) are both industrials companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Profitability

This table compares Wolters Kluwer and LegalZoom.com’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wolters Kluwer	N/A	N/A	N/A
LegalZoom.com	3.10%	22.36%	7.19%

Dividends

Wolters Kluwer pays an annual dividend of $0.60 per share and has a dividend yield of 0.3%. LegalZoom.com pays an annual dividend of $1.44 per share and has a dividend yield of 21.0%. Wolters Kluwer pays out 46.6% of its earnings in the form of a dividend. LegalZoom.com pays out 1,309.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of current ratings and target prices for Wolters Kluwer and LegalZoom.com, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wolters Kluwer	0	0	0	0	N/A
LegalZoom.com	2	6	1	0	1.89

LegalZoom.com has a consensus price target of $9.79, indicating a potential upside of 42.65%. Given LegalZoom.com’s higher probable upside, analysts clearly believe LegalZoom.com is more favorable than Wolters Kluwer.

Valuation and Earnings

This table compares Wolters Kluwer and LegalZoom.com”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wolters Kluwer	N/A	N/A	N/A	$1.28	134.07
LegalZoom.com	$677.51 million	1.91	$13.95 million	$0.11	62.36

LegalZoom.com has higher revenue and earnings than Wolters Kluwer. LegalZoom.com is trading at a lower price-to-earnings ratio than Wolters Kluwer, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

46.8% of Wolters Kluwer shares are owned by institutional investors. Comparatively, 82.0% of LegalZoom.com shares are owned by institutional investors. 10.5% of LegalZoom.com shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

LegalZoom.com beats Wolters Kluwer on 9 of the 12 factors compared between the two stocks.

About Wolters Kluwer

Wolters Kluwer N.V. provides professional information, software solutions, and services in the Netherlands, rest of Europe, the United States, Canada, the Asia Pacific, and internationally. The company operates through Health; Tax & Accounting; Financial & Corporate Compliance; Legal & Regulatory; and Corporate Performance & ESG segments. The Health segment offers clinical technology and evidence-based solutions that drive effective decision-making and improved outcomes across healthcare. It serves hospitals, healthcare organizations, clinicians, students, schools, libraries, payers, life sciences, and pharmacies. The Tax & Accounting segment offers solutions that help tax, accounting, and audit professionals to drive productivity, navigate change, and deliver better outcomes. It serves accounting firms, tax and auditing departments, businesses of all sizes, government agencies, libraries, and universities. The Financial & Corporate Compliance segment offers solutions for legal entity compliance and banking product compliance. It serves corporations, small businesses, law firms, banks, non-bank lenders, credit unions, insurers, and securities firms. The Legal & Regulatory segment provides information, insights, and workflow solutions for changing regulatory obligations, managing risk, and increasing efficiency. It provides solutions for legal and compliance professionals in law firms, corporate legal departments, universities, and government organizations. The Corporate Performance & ESG segment offers enterprise software to drive financial and sustainability performance and manage risks, meet reporting requirements, improve safety and productivity, and reduce environmental impact. It serves corporate finance, audit, planning, risk, environmental, health and safety, operational risk management, and sustainability professionals in corporations, banks, and governments. Wolters Kluwer N.V. was founded in 1836 and is based in Alphen aan den Rijn, the Netherlands.

About LegalZoom.com

LegalZoom.com, Inc., together with its subsidiaries, operates an online platform that supports the legal, compliance, and business management needs of small businesses and consumers in the United States. The company’s platform offers business formation products, such as limited liability company, incorporation of C and S corporations, nonprofit formations, doing-business-as, corporate changes and filings, business licenses, legal forms, and beneficial ownership information reports; intellectual property products consisting of trademark and patent applications, and copyright registrations; and tax services, including business and personal tax preparations. It also provides consumer, estate planning, and other services comprising last will and testament, living will, living trust, power of attorney, and name change. In addition, the company offers subscriptions services, including registered agent, compliance, attorney advice, tax advice and preparation, eSignature, virtual mail and check deposit services, trademark monitoring, and estate planning bundle. The company was incorporated in 1999 and is headquartered in Mountain View, California.