The big day has come and gone. The filing deadline was extended to April 18 this year so we had an extra day to hold onto our tax dollars before sending them off to the Federal government.
By now, the government coffers are filled with plenty of cash to spend on necessary projects like studying male pattern baldness, developing climate change-themed video games and yoga classes for select government employees (and yes, these are all real expenditures from 2015).
In addition to funding these critical programs, it is going to use billions of dollars to pay consultants and contractors to carry out other equally important tasks.
Fortunately for us, many of these companies are publicly traded. This affords us a chance to get back some of our tax money as long-term gains as tax money is sent to help these companies grow revenues and profits.
Stocks to Take Back Tax Dollars: The Providence Service Corporation (PRSC)
The Providence Service Corporation (PRSC) is a great choice for people who want to earn some recycled government dollar gains. The company provides a range of services that are funded in great deal by government payments.
The U.S. Healthcare division has two segments. First, the NET Services segment is the largest manager of nonemergency medical transportation service providers in the country. They have contracts with Medicaid agencies, Managed Care Organizations, healthcare providers and state government agencies. Second, Health Assessment Services provides comprehensive health assessments and in-home chronic care management, and works with Medicaid and Medicare Advantage.
Meanwhile, Workforce Development Services primarily provides employability services, youth services and offender rehabilitation services. These programs are operated as government-sponsored programs throughout countries in Europe, North America, Asia and Australia.
As long as government grows, so will Providence Service.
Stocks to Take Back Tax Dollars: Maximus, Inc. (MMS)
That’s pretty much the case for Maximus, Inc. (MMS) as well. They provide what they call business process management services for government agencies in the United States, the United Kingdom, Australia, Canada, Saudi Arabia and New Zealand.
They have a healthcare division that works with programs like Medicaid, Children’s Health Insurance Program, the Affordable Care Act, Health Insurance British Columbia, the Health Assessment Advisory Service and Fit for Work Service.
The U.S. Federal Services segment provides a wide range of services, including things like document and records management; independent medical reviews and worker’s compensation benefit appeals; modernization of systems and IT infrastructure; and data analytics.
MMS’ Human Services segment provides national, state and local human services agencies with consulting services for welfare-to-work, child support, higher education and K-12 special-education programs.
There are not too many areas of government where MAXIMUS does not recycle tax payer dollars into corporate profits.
Stocks to Take Back Tax Dollars: NIC Inc. (EGOV)
One of the more interesting tax dollar recyclers is NIC Inc. (EGOV). They are the nation’s leading provider of official government websites, online services and secure payment processing solutions. They currently work with more than 4,500 federal, state and local agencies in the United States.
The news feed for this company shows recent projects to accept tax payments, process professional license payments, create websites for agencies like the Kentucky Board of Dentistry and help develop electronic passes for national parks.
The Kansas-based company has successfully gotten in front of two powerful trends — the growth of government and the continuing shift to the online and mobile universe. Management is nothing if not forward thinking, as in 2015 they launched new services that helped government regulate the medical and recreational marijuana industry by providing licensing and regulation to patients and businesses alike.
EGOV should be a source of government-funded profits for patient investors for a long time, as long as management continues to stay in front of the spending curve.
As of this writing, Tim Melvin did not hold a position in any of the aforementioned securities. He is the author of the Banking on Profits newsletter covering the community bank stock opportunity and the Deep Value Report that seeks out undervalued stocks that are likely to survive until they thrive and capture the value effect that has been proven to beat the market over time.