Jernigan Capital (NYSE: JCAP) and Corrections Corp. of America (NYSE:CXW) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Insider and Institutional Ownership

60.6% of Jernigan Capital shares are owned by institutional investors. Comparatively, 86.2% of Corrections Corp. of America shares are owned by institutional investors. 3.2% of Jernigan Capital 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 large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility & Risk

Jernigan Capital has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500. Comparatively, Corrections Corp. of America has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Jernigan Capital and Corrections Corp. of America, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Jernigan Capital 0 1 2 0 2.67
Corrections Corp. of America 0 1 3 0 2.75

Jernigan Capital currently has a consensus price target of $25.33, suggesting a potential upside of 27.24%. Corrections Corp. of America has a consensus price target of $30.33, suggesting a potential upside of 17.37%. Given Jernigan Capital’s higher probable upside, equities research analysts plainly believe Jernigan Capital is more favorable than Corrections Corp. of America.

Dividends

Jernigan Capital pays an annual dividend of $1.40 per share and has a dividend yield of 7.0%. Corrections Corp. of America pays an annual dividend of $1.68 per share and has a dividend yield of 6.5%. Jernigan Capital pays out 69.7% of its earnings in the form of a dividend. 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. Corrections Corp. of America has raised its dividend for 4 consecutive years. Jernigan Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Jernigan Capital and Corrections Corp. of America’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Jernigan Capital 185.96% 9.37% 7.91%
Corrections Corp. of America 11.62% 14.54% 6.51%

Valuation and Earnings

This table compares Jernigan Capital and Corrections Corp. of America’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Jernigan Capital $7.80 million 36.34 $28.62 million $2.01 9.91
Corrections Corp. of America $1.82 billion 1.68 $452.80 million $1.79 14.44

Corrections Corp. of America has higher revenue and earnings than Jernigan Capital. Jernigan Capital is trading at a lower price-to-earnings ratio than Corrections Corp. of America, indicating that it is currently the more affordable of the two stocks.

Summary

Corrections Corp. of America beats Jernigan Capital on 9 of the 17 factors compared between the two stocks.

Jernigan Capital Company Profile

Jernigan Capital, Inc. is a commercial real estate finance company. The Company provides capital to private developers, owners and operators of self-storage facilities. It intends to generate long-term returns on development property investments through a fixed rate of interest on its invested capital together with an interest in the positive cash flows of the self-storage development from operations, sales and/or refinancings. It generates cash flows from construction loans and operating property loans in the form of a fixed interest rate and origination fees. It originates various loans, such as bridge loans and credit lines. It has development property investments in Orlando, Atlanta, Tampa, Chicago and Miami. Its operating property loans are located in New Orleans, Newark, Nashville, Sacramento and Chicago. The Company conducts its investment activities through Jernigan Capital Operating Company, LLC. The Company is externally managed and advised by JCap Advisors, LLC.

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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