Lennar (NYSE:LEN.B) & Geo Group (NYSE:GEO) Head to Head Survey

Lennar (NYSE:LEN.B) and Geo Group (NYSE:GEO) are both construction companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, profitability, risk, analyst recommendations, institutional ownership, dividends and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Lennar and Geo Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lennar	0	0	0	0	0.00
Geo Group	0	0	4	0	3.00

Geo Group has a consensus target price of $38.00, indicating a potential upside of 57.52%. Given Geo Group’s stronger consensus rating and higher probable upside, analysts plainly believe Geo Group is more favorable than Lennar.

Volatility and Risk

Lennar has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500. Comparatively, Geo Group has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500.

Institutional and Insider Ownership

3.3% of Lennar shares are owned by institutional investors. Comparatively, 76.1% of Geo Group shares are owned by institutional investors. 15.0% of Lennar shares are owned by insiders. Comparatively, 4.6% of Geo Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Lennar and Geo Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lennar	$35.44 billion	0.75	$3.93 billion	$13.73	7.35
Geo Group	$2.42 billion	1.41	$31.97 million	$0.19	126.97

Lennar has higher revenue and earnings than Geo Group. Lennar is trading at a lower price-to-earnings ratio than Geo Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Lennar and Geo Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lennar	9.20%	12.32%	8.33%
Geo Group	1.19%	7.36%	2.67%

Summary

Lennar beats Geo Group on 8 of the 14 factors compared between the two stocks.

About Lennar

Lennar Corporation, together with its subsidiaries, operates as a homebuilder primarily under the Lennar brand in the United States. It operates through Homebuilding East, Homebuilding Central, Homebuilding Texas, Homebuilding West, Financial Services, Multifamily, and Lennar Other segments. The company's homebuilding operations include the construction and sale of single-family attached and detached homes, as well as the purchase, development, and sale of residential land. It primarily sells single-family attached and detached homes in communities targeted to first-time, move-up, active adult, and luxury homebuyers. The company also offers residential mortgage financing, title insurance, and closing services for home buyers and others. In addition, it involves in the fund investment activity; and originates and sells into securitizations commercial mortgage loans. Further, the company develops, constructs, and manages multifamily rental properties. Lennar Corporation was founded in 1954 and is based in Miami, Florida.

About Geo Group

The GEO Group, Inc. (NYSE: GEO) engages in ownership, leasing, and management of secure facilities, processing centers, and community-based reentry facilities in the United States, Australia, the United Kingdom, and South Africa. The company also provides secure facility management services, including the provision of security, administrative, rehabilitation, education, and food services; reentry services, such as temporary housing, programming, employment assistance, and other services; electronic monitoring and supervision services; and transportation services; as well as designs, constructs, and finances new facilities through projects. The company was founded in 1984 and is based in Boca Raton, Florida.