Contrasting The GEO Group (GEO) & Corecivic (CXW)

Corecivic (NYSE: CXW) and The GEO Group (NYSE:GEO) are both mid-cap financials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, valuation, earnings and dividends.

Earnings and Valuation

This table compares Corecivic and The GEO Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Corecivic $1.85 billion 1.46 $219.91 million $1.67 13.69
The GEO Group $2.18 billion 1.27 $148.71 million $1.36 16.38

Corecivic has higher earnings, but lower revenue than The GEO Group. Corecivic is trading at a lower price-to-earnings ratio than The GEO Group, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Corecivic has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500. Comparatively, The GEO Group has a beta of 1.52, indicating that its share price is 52% more volatile than the S&P 500.

Dividends

Corecivic pays an annual dividend of $1.68 per share and has a dividend yield of 7.3%. The GEO Group pays an annual dividend of $1.88 per share and has a dividend yield of 8.4%. Corecivic pays out 100.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. The GEO Group pays out 138.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Corecivic has increased its dividend for 5 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Corecivic and The GEO Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Corecivic 0 1 3 0 2.75
The GEO Group 0 1 3 0 2.75

Corecivic presently has a consensus target price of $36.00, indicating a potential upside of 57.41%. The GEO Group has a consensus target price of $33.33, indicating a potential upside of 49.61%. Given Corecivic’s higher possible upside, equities research analysts plainly believe Corecivic is more favorable than The GEO Group.

Institutional and Insider Ownership

82.5% of Corecivic shares are held by institutional investors. Comparatively, 95.9% of The GEO Group shares are held by institutional investors. 1.3% of Corecivic shares are held by insiders. Comparatively, 2.4% of The GEO Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Corecivic and The GEO Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Corecivic 11.03% 13.54% 6.10%
The GEO Group 7.05% 14.85% 4.17%

Summary

Corecivic beats The GEO Group on 8 of the 15 factors compared between the two stocks.

Corecivic Company Profile

CoreCivic, Inc., formerly Corrections Corporation of America, is a diversified government solutions company. The Company provides partnership correctional, detention and residential reentry facilities and operates prison in the United States. The Company’s business offerings include CoreCivic Safety, CoreCivic Properties, and CoreCivic Community. The Company provides a range of solutions to government partners that serve the public good corrections and detention management, government real estate solutions, and network of residential reentry centers. As of March 31, 2017, the Company owned or controlled 48 correctional and detention facilities, owned or controlled 27 residential reentry centers, and managed an additional 11 correctional and detention facilities owned by its government partners, with a total design capacity of approximately 88,400 beds in 20 states.

The GEO Group Company Profile

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.

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