Analyzing CareTrust REIT (CTRE) and Geo Group Inc (The) (GEO)

CareTrust REIT (NASDAQ: CTRE) and Geo Group Inc (The) (NYSE:GEO) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, valuation, profitabiliy, dividends, risk and analyst recommendations.

Profitability

This table compares CareTrust REIT and Geo Group Inc (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CareTrust REIT 30.57% 7.87% 3.86%
Geo Group Inc (The) 7.06% 15.32% 4.17%

Valuation and Earnings

This table compares CareTrust REIT and Geo Group Inc (The)’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CareTrust REIT $111.66 million 12.73 $91.06 million $0.55 35.64
Geo Group Inc (The) $2.22 billion 1.67 $388.80 million $1.39 21.92

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

Insider & Institutional Ownership

86.9% of CareTrust REIT shares are held by institutional investors. Comparatively, 62.8% of Geo Group Inc (The) shares are held by institutional investors. 1.6% of CareTrust REIT shares are held by insiders. Comparatively, 2.4% of Geo Group Inc (The) shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for CareTrust REIT and Geo Group Inc (The), as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CareTrust REIT 0 5 3 0 2.38
Geo Group Inc (The) 0 2 2 0 2.50

CareTrust REIT presently has a consensus price target of $17.67, indicating a potential downside of 9.86%. Geo Group Inc (The) has a consensus price target of $29.22, indicating a potential downside of 4.10%. Given Geo Group Inc (The)’s stronger consensus rating and higher possible upside, analysts clearly believe Geo Group Inc (The) is more favorable than CareTrust REIT.

Dividends

Geo Group Inc (The) pays an annual dividend of $1.88 per share and has a dividend yield of 6.2%. CareTrust REIT does not pay a dividend. Geo Group Inc (The) pays out 135.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Geo Group Inc (The) has increased its dividend for 4 consecutive years.

Volatility & Risk

CareTrust REIT has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500. Comparatively, Geo Group Inc (The) has a beta of 1.53, suggesting that its share price is 53% more volatile than the S&P 500.

Summary

Geo Group Inc (The) beats CareTrust REIT on 11 of the 17 factors compared between the two stocks.

CareTrust REIT Company Profile

CareTrust REIT, Inc. is a self-administered, self-managed real estate investment trust. The Company is engaged in the ownership, acquisition and leasing of healthcare-related properties. It makes investments in healthcare-related real estate assets. As of December 31, 2016, its real estate portfolio included 154 skilled nursing facilities (SNFs), SNF Campuses, assisted living facilities and independent living facilities. As of December 31, 2016, the 93 facilities leased to The Ensign Group, Inc. had a total of 9,916 beds and units and are located in Arizona, California, Colorado, Idaho, Iowa, Nebraska, Nevada, Texas, Utah and Washington; the 16 facilities leased to affiliates of Pristine Senior Living, LLC had a total of 1,488 beds and units; and the 42 remaining leased properties had a total of 3,515 beds and units and are located in California, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Maryland, Michigan, Minnesota, North Carolina, Texas, Virginia, Washington and Wisconsin.

Geo Group Inc (The) Company Profile

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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