Reviewing Geo Group (NYSE:GEO) and American Tower (AMT)

Geo Group (NYSE: GEO) and American Tower (NYSE:AMT) are both mid-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, dividends, risk, profitability and institutional ownership.

Earnings & Valuation

This table compares Geo Group and American Tower’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Geo Group $2.18 billion 1.47 $148.71 million $1.35 19.13
American Tower $5.79 billion 10.65 $956.42 million $2.63 54.60

American Tower has higher revenue and earnings than Geo Group. Geo Group is trading at a lower price-to-earnings ratio than American Tower, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Geo Group has a beta of 1.52, suggesting that its share price is 52% more volatile than the S&P 500. Comparatively, American Tower has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Geo Group and American Tower, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Geo Group 0 1 2 0 2.67
American Tower 0 0 13 0 3.00

Geo Group presently has a consensus target price of $33.78, indicating a potential upside of 30.77%. American Tower has a consensus target price of $158.00, indicating a potential upside of 10.02%. Given Geo Group’s higher possible upside, research analysts clearly believe Geo Group is more favorable than American Tower.

Insider & Institutional Ownership

95.7% of Geo Group shares are held by institutional investors. Comparatively, 91.9% of American Tower shares are held by institutional investors. 2.4% of Geo Group shares are held by company insiders. Comparatively, 0.9% of American Tower shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Geo Group and American Tower’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Geo Group 7.05% 14.85% 4.17%
American Tower 18.63% 16.98% 3.80%

Dividends

Geo Group pays an annual dividend of $1.88 per share and has a dividend yield of 7.3%. American Tower pays an annual dividend of $2.64 per share and has a dividend yield of 1.8%. Geo Group pays out 139.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Tower pays out 100.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Geo Group has increased its dividend for 4 consecutive years and American Tower has increased its dividend for 5 consecutive years.

Summary

American Tower beats Geo Group on 11 of the 17 factors compared between the two stocks.

About Geo Group

The GEO Group, Inc. is a real estate investment trust (REIT) specializing in the ownership, leasing and management of correctional, detention and re-entry facilities and the provision of community-based services and youth services in the United States, Australia, South Africa, the United Kingdom and Canada. As of December 31, 2013, its worldwide operations included the management and/or ownership of approximately 77,000 beds at 98 correctional, detention and community based facilities, including idle faclities and projects under development, and also included the provision of monitoring of more than 70,000 offenders in a community-based environment on behalf of approximately 900 federal, state and local correctional agencies located in all 50 states. The Company operates in four segments: United States Corrections and Detention segment, segment; International Services segment and Facility Construction and Design segment.

About American Tower

American Tower Corporation (ATC) is a holding company. The Company operates as a real estate investment trust (REIT), which owns, operates and develops multitenant communications real estate. ATC’s segments include U.S. property, Asia property, EMEA property, Latin America property, Services and Other. Its primary business is property operations, which include the leasing of space on communications sites to wireless service providers, radio and television broadcast companies, wireless data providers, government agencies and municipalities, and tenants in various other industries. Its U.S. property segment includes operations in the United States. Its Asia property segment includes operations in India. The EMEA property segment includes operations in Germany, Ghana, Nigeria, South Africa and Uganda. The Latin America property segment includes operations in Brazil, Chile, Colombia, Costa Rica, Mexico and Peru. Its services segment offers tower-related services in the United States.

Receive News & Ratings for Geo Group Inc (The) Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Geo Group Inc (The) and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply