QTS Realty Trust (QTS) and Corrections Corp. of America (CXW) Critical Survey
QTS Realty Trust (NYSE: QTS) and Corrections Corp. of America (NYSE:CXW) are both mid-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitabiliy.
Institutional and Insider Ownership
87.6% of Corrections Corp. of America shares are owned by institutional investors. 17.3% of QTS Realty Trust shares are owned by insiders. Comparatively, 1.3% of Corrections Corp. of America shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
QTS Realty Trust pays an annual dividend of $1.56 per share and has a dividend yield of 2.9%. Corrections Corp. of America pays an annual dividend of $1.68 per share and has a dividend yield of 5.9%. QTS Realty Trust pays out 371.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Corrections Corp. of America pays out 88.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. QTS Realty Trust has increased its dividend for 4 consecutive years and Corrections Corp. of America has increased its dividend for 2 consecutive years. Corrections Corp. of America is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a breakdown of recent recommendations and price targets for QTS Realty Trust and Corrections Corp. of America, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|QTS Realty Trust||0||3||8||0||2.73|
|Corrections Corp. of America||0||1||3||0||2.75|
QTS Realty Trust presently has a consensus target price of $56.40, indicating a potential upside of 5.50%. Corrections Corp. of America has a consensus target price of $32.00, indicating a potential upside of 11.54%. Given Corrections Corp. of America’s stronger consensus rating and higher possible upside, analysts clearly believe Corrections Corp. of America is more favorable than QTS Realty Trust.
Risk and Volatility
QTS Realty Trust has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500. Comparatively, Corrections Corp. of America has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500.
Valuation & Earnings
This table compares QTS Realty Trust and Corrections Corp. of America’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|QTS Realty Trust||$413.56 million||6.21||$160.18 million||$0.42||127.29|
|Corrections Corp. of America||$1.85 billion||1.83||$470.24 million||$1.90||15.10|
Corrections Corp. of America has higher revenue and earnings than QTS Realty Trust. Corrections Corp. of America is trading at a lower price-to-earnings ratio than QTS Realty Trust, indicating that it is currently the more affordable of the two stocks.
This table compares QTS Realty Trust and Corrections Corp. of America’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|QTS Realty Trust||4.96%||2.14%||1.01%|
|Corrections Corp. of America||12.10%||15.42%||6.83%|
Corrections Corp. of America beats QTS Realty Trust on 12 of the 17 factors compared between the two stocks.
QTS Realty Trust Company Profile
QTS Realty Trust, Inc. (QTS) is a provider of secure, compliant data center solutions, hybrid cloud and fully managed services. The Company owns, develops and operates carrier-neutral and multi-tenant data centers. Its data centers are facilities that house the network and computer equipment of multiple customers and provide access to a range of communications carriers. The Company has an integrated platform through which it owns and operates its data centers and provides a range of information technology (IT) infrastructure solutions. Its spectrum of core data center products is referred to as 3Cs, which consists of Custom Data Center (C1), Colocation (C2), and Cloud and Managed Services (C3). Its 3C integrated technology platform provides information technology solutions for Web and information technology applications. Its data centers facilities are used by its customers to house, power and cool the networking equipment and computer systems that support their business processes.
Corrections Corp. of America 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.
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