Contrasting OUTFRONT Media (OUT) & Corrections Corp. of America (CXW)
OUTFRONT Media (NYSE: OUT) and Corrections Corp. of America (NYSE:CXW) are both mid-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, analyst recommendations, dividends, earnings and institutional ownership.
Institutional and Insider Ownership
86.4% of Corrections Corp. of America shares are held by institutional investors. 0.5% of OUTFRONT Media shares are held by company insiders. Comparatively, 1.3% of Corrections Corp. of America shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Risk and Volatility
OUTFRONT Media has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500. Comparatively, Corrections Corp. of America has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500.
OUTFRONT Media pays an annual dividend of $1.44 per share and has a dividend yield of 6.1%. Corrections Corp. of America pays an annual dividend of $1.68 per share and has a dividend yield of 6.8%. OUTFRONT Media pays out 189.5% 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 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. OUTFRONT Media has raised its dividend for 4 consecutive years. Corrections Corp. of America is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares OUTFRONT Media and Corrections Corp. of America’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%|
This is a breakdown of recent recommendations and price targets for OUTFRONT Media and Corrections Corp. of America, 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|
OUTFRONT Media presently has a consensus target price of $30.17, suggesting a potential upside of 28.64%. Corrections Corp. of America has a consensus target price of $36.00, suggesting a potential upside of 45.99%. Given Corrections Corp. of America’s stronger consensus rating and higher possible upside, analysts plainly believe Corrections Corp. of America is more favorable than OUTFRONT Media.
Valuation & Earnings
This table compares OUTFRONT Media and Corrections Corp. of America’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|OUTFRONT Media||$1.51 billion||2.15||$388.60 million||$0.76||30.86|
|Corrections Corp. of America||$1.82 billion||1.60||$452.80 million||$1.79||13.78|
Corrections Corp. of America has higher revenue and earnings than OUTFRONT Media. Corrections Corp. of America is trading at a lower price-to-earnings ratio than OUTFRONT Media, indicating that it is currently the more affordable of the two stocks.
Corrections Corp. of America beats OUTFRONT Media on 12 of the 17 factors compared between the two stocks.
OUTFRONT Media Company Profile
OUTFRONT Media Inc. is a real estate investment trust (REIT), which provides advertising space (displays) on out-of-home advertising structures and sites in the United States and Canada. The Company’s segments are U.S. Media and Other. The U.S. Media segment includes U.S. Billboard and Transit. The Other segment includes International and Sports Marketing. The Company’s inventory consists of billboard displays, which are primarily located on the heavily traveled highways and roadways in Nielsen Designated Market Areas (DMAs), and transit advertising displays operated under multi-year contracts with municipalities in cities across the United States and Canada. The Company also has marketing and multimedia rights agreements with colleges, universities and other educational institutions, which entitle the Company to operate on-campus advertising displays, as well as manage marketing opportunities, media rights and experiential entertainment at sports events.
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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