Comparing The GEO Group (GEO) & Gaming and Leisure Properties (GLPI)

The GEO Group (NYSE:GEO) and Gaming and Leisure Properties (NASDAQ:GLPI) are both mid-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.

Dividends

The GEO Group pays an annual dividend of $1.88 per share and has a dividend yield of 8.2%. Gaming and Leisure Properties pays an annual dividend of $2.52 per share and has a dividend yield of 7.3%. The GEO Group pays out 73.7% of its earnings in the form of a dividend. Gaming and Leisure Properties pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. The GEO Group has increased its dividend for 5 consecutive years and Gaming and Leisure Properties has increased its dividend for 3 consecutive years. The GEO Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

88.6% of The GEO Group shares are owned by institutional investors. Comparatively, 87.1% of Gaming and Leisure Properties shares are owned by institutional investors. 36.5% of The GEO Group shares are owned by company insiders. Comparatively, 5.9% of Gaming and Leisure Properties shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares The GEO Group and Gaming and Leisure Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The GEO Group 6.43% 14.63% 3.91%
Gaming and Leisure Properties 38.95% 16.10% 5.15%

Risk & Volatility

The GEO Group has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500. Comparatively, Gaming and Leisure Properties has a beta of 0.76, meaning that its stock price is 24% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for The GEO Group and Gaming and Leisure Properties, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The GEO Group 0 1 1 0 2.50
Gaming and Leisure Properties 1 3 7 0 2.55

The GEO Group presently has a consensus price target of $28.50, indicating a potential upside of 23.75%. Gaming and Leisure Properties has a consensus price target of $39.60, indicating a potential upside of 14.06%. Given The GEO Group’s higher possible upside, research analysts clearly believe The GEO Group is more favorable than Gaming and Leisure Properties.

Valuation and Earnings

This table compares The GEO Group and Gaming and Leisure Properties’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
The GEO Group $2.26 billion 1.24 $146.24 million $2.55 9.03
Gaming and Leisure Properties $971.31 million 7.65 $380.59 million $3.15 11.02

Gaming and Leisure Properties has lower revenue, but higher earnings than The GEO Group. The GEO Group is trading at a lower price-to-earnings ratio than Gaming and Leisure Properties, indicating that it is currently the more affordable of the two stocks.

Summary

Gaming and Leisure Properties beats The GEO Group on 9 of the 17 factors compared between the two stocks.

The GEO Group Company Profile

The GEO Group, Inc. (NYSE: GEO) is the first fully integrated equity real estate investment trust ("REIT") specializing in the design, financing, development, and operation of correctional, detention, and community reentry facilities around the globe. GEO is the world's leading provider of diversified correctional, detention, community reentry, and electronic monitoring services to government agencies worldwide with operations in the United States, Australia, South Africa, and the United Kingdom. GEO's worldwide operations include the ownership and/or management of 139 facilities totaling approximately 96,000 beds, including projects under development, with a growing workforce of approximately 23,000 professionals.

Gaming and Leisure Properties Company Profile

GLPI is engaged in the business of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements, pursuant to which the tenant is responsible for all facility maintenance, insurance required in connection with the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties. GLPI expects to grow its portfolio by pursuing opportunities to acquire additional gaming facilities to lease to gaming operators. GLPI also intends to diversify its portfolio over time, including by acquiring properties outside the gaming industry to lease to third parties. GLPI elected to be taxed as a REIT for United States federal income tax purposes commencing with the 2014 taxable year and is the first gaming-focused REIT in North America.

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