Financial Comparison: Corrections Corp. of America (CXW) versus The Competition
Corrections Corp. of America (NYSE: CXW) is one of 16 publicly-traded companies in the “Specialized REITs” industry, but how does it weigh in compared to its rivals? We will compare Corrections Corp. of America to related businesses based on the strength of its profitability, risk, valuation, analyst recommendations, earnings, institutional ownership and dividends.
Corrections Corp. of America pays an annual dividend of $1.68 per share and has a dividend yield of 6.5%. 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. As a group, “Specialized REITs” companies pay a dividend yield of 4.2% and pay out 170.4% of their earnings in the form of a dividend. Corrections Corp. of America has raised its dividend for 4 consecutive years. Corrections Corp. of America is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.
This table compares Corrections Corp. of America and its rivals’ 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%|
|Corrections Corp. of America Competitors||36.41%||8.84%||3.25%|
This is a breakdown of current recommendations for Corrections Corp. of America and its rivals, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Corrections Corp. of America||0||1||3||0||2.75|
|Corrections Corp. of America Competitors||26||210||553||20||2.70|
Corrections Corp. of America currently has a consensus target price of $36.00, suggesting a potential upside of 38.67%. As a group, “Specialized REITs” companies have a potential upside of 10.49%. Given Corrections Corp. of America’s stronger consensus rating and higher possible upside, equities analysts clearly believe Corrections Corp. of America is more favorable than its rivals.
Valuation and Earnings
This table compares Corrections Corp. of America and its rivals gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|Corrections Corp. of America||$1.82 billion||$452.80 million||14.50|
|Corrections Corp. of America Competitors||$966.23 million||$509.71 million||29.28|
Corrections Corp. of America has higher revenue, but lower earnings than its rivals. Corrections Corp. of America is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.
Insider and Institutional Ownership
86.2% of Corrections Corp. of America shares are held by institutional investors. Comparatively, 64.6% of shares of all “Specialized REITs” companies are held by institutional investors. 1.3% of Corrections Corp. of America shares are held by insiders. Comparatively, 6.4% of shares of all “Specialized REITs” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Volatility & Risk
Corrections Corp. of America has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500. Comparatively, Corrections Corp. of America’s rivals have a beta of 0.85, suggesting that their average share price is 15% less volatile than the S&P 500.
Corrections Corp. of America beats its rivals on 10 of the 15 factors compared.
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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