Geo Group (NYSE: GEO) is one of 15 public companies in the “Specialized REITs” industry, but how does it contrast to its competitors? We will compare Geo Group to similar businesses based on the strength of its institutional ownership, analyst recommendations, risk, profitability, earnings, dividends and valuation.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Geo Group and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Geo Group 0 1 2 0 2.67
Geo Group Competitors 31 246 642 23 2.70

Geo Group currently has a consensus target price of $33.78, suggesting a potential upside of 30.77%. As a group, “Specialized REITs” companies have a potential upside of 15.75%. Given Geo Group’s higher probable upside, analysts clearly believe Geo Group is more favorable than its competitors.

Risk & Volatility

Geo Group has a beta of 1.5, indicating that its stock price is 50% more volatile than the S&P 500. Comparatively, Geo Group’s competitors have a beta of 0.91, indicating that their average stock price is 9% less volatile than the S&P 500.

Dividends

Geo Group pays an annual dividend of $1.88 per share and has a dividend yield of 7.3%. Geo Group pays out 138.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Specialized REITs” companies pay a dividend yield of 4.4% and pay out 197.7% of their earnings in the form of a dividend. Geo Group has increased its dividend for 4 consecutive years. Geo Group is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

95.7% of Geo Group shares are held by institutional investors. Comparatively, 65.6% of shares of all “Specialized REITs” companies are held by institutional investors. 2.4% of Geo Group shares are held by insiders. Comparatively, 6.3% of shares of all “Specialized REITs” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Geo Group and its competitors revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Geo Group $2.18 billion $148.71 million 18.99
Geo Group Competitors $957.09 million $112.54 million 93.20

Geo Group has higher revenue and earnings than its competitors. Geo Group is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Geo Group and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Geo Group 7.05% 14.85% 4.17%
Geo Group Competitors 25.87% 7.30% 2.55%

Summary

Geo Group beats its competitors on 9 of the 15 factors compared.

About Geo Group

The GEO Group, Inc. is a real estate investment trust (REIT) specializing in the ownership, leasing and management of correctional, detention and re-entry facilities and the provision of community-based services and youth services in the United States, Australia, South Africa, the United Kingdom and Canada. As of December 31, 2013, its worldwide operations included the management and/or ownership of approximately 77,000 beds at 98 correctional, detention and community based facilities, including idle faclities and projects under development, and also included the provision of monitoring of more than 70,000 offenders in a community-based environment on behalf of approximately 900 federal, state and local correctional agencies located in all 50 states. The Company operates in four segments: United States Corrections and Detention segment, segment; International Services segment and Facility Construction and Design segment.

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