Head-To-Head Analysis: Corrections Corp. of America (CXW) & Gladstone Land Corporation (LAND)
Corrections Corp. of America (NYSE: CXW) and Gladstone Land Corporation (NASDAQ:LAND) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, profitability, institutional ownership, earnings and analyst recommendations.
Corrections Corp. of America pays an annual dividend of $1.68 per share and has a dividend yield of 6.3%. Gladstone Land Corporation pays an annual dividend of $0.53 per share and has a dividend yield of 4.3%. Corrections Corp. of America pays out 93.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Gladstone Land Corporation pays out 1,060.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Corrections Corp. of America has raised its dividend for 4 consecutive years. Corrections Corp. of America is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Corrections Corp. of America and Gladstone Land Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Corrections Corp. of America||11.62%||14.54%||6.51%|
|Gladstone Land Corporation||2.58%||0.57%||0.15%|
Earnings & Valuation
This table compares Corrections Corp. of America and Gladstone Land Corporation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Corrections Corp. of America||$1.82 billion||1.75||$452.80 million||$1.79||15.02|
|Gladstone Land Corporation||$21.14 million||7.05||$15.48 million||$0.05||248.05|
Corrections Corp. of America has higher revenue and earnings than Gladstone Land Corporation. Corrections Corp. of America is trading at a lower price-to-earnings ratio than Gladstone Land Corporation, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent recommendations and price targets for Corrections Corp. of America and Gladstone Land Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Corrections Corp. of America||0||1||3||0||2.75|
|Gladstone Land Corporation||0||0||2||0||3.00|
Corrections Corp. of America currently has a consensus price target of $30.33, suggesting a potential upside of 12.85%. Gladstone Land Corporation has a consensus price target of $14.25, suggesting a potential upside of 14.92%. Given Gladstone Land Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Gladstone Land Corporation is more favorable than Corrections Corp. of America.
Insider & Institutional Ownership
86.2% of Corrections Corp. of America shares are held by institutional investors. Comparatively, 24.7% of Gladstone Land Corporation shares are held by institutional investors. 1.3% of Corrections Corp. of America shares are held by company insiders. Comparatively, 21.9% of Gladstone Land Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Risk and Volatility
Corrections Corp. of America has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500. Comparatively, Gladstone Land Corporation has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.
Corrections Corp. of America beats Gladstone Land Corporation on 11 of the 17 factors compared between the two stocks.
About Corrections Corp. of America
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.
About Gladstone Land Corporation
Gladstone Land Corporation is an agricultural real estate investment trust (REIT). The Company is engaged in the business of owning and leasing farmland. The Company also owns various farm-related facilities, such as cooling facilities, buildings utilized for the storage and assembly of boxes for shipping produce (box barns), packinghouses, processing facilities and various storage facilities. The Company is engaged in leasing its farms and farm-related facilities to independent or corporate farming operations. As of July 17, 2017, the Company owned 69 farms, including 58,777 total acres across seven states in the United States (Arizona, California, Colorado, Florida, Michigan, Nebraska and Oregon). As of December 31, 2016, the Company’s farms and facilities were leased to 40 different, unrelated tenants that are either independent or corporate farming operations. The Company focuses to own primarily single-tenant, agricultural real property.
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