Corrections Corp. of America (NYSE: CXW) is one of 16 publicly-traded companies in the “Specialized REITs” industry, but how does it contrast to its peers? We will compare Corrections Corp. of America to related businesses based on the strength of its profitability, analyst recommendations, earnings, valuation, institutional ownership, risk and dividends.

Profitability

This table compares Corrections Corp. of America and its peers’ 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%
Corrections Corp. of America Competitors 34.60% 8.74% 3.15%

Valuation and Earnings

This table compares Corrections Corp. of America and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Corrections Corp. of America $1.82 billion $452.80 million 14.26
Corrections Corp. of America Competitors $1.00 billion $531.02 million 28.21

Corrections Corp. of America has higher revenue, but lower earnings than its peers. Corrections Corp. of America is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Analyst Ratings

This is a summary of current ratings and price targets for Corrections Corp. of America and its peers, 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
Corrections Corp. of America Competitors 85 320 599 24 2.55

Corrections Corp. of America currently has a consensus target price of $30.33, suggesting a potential upside of 18.81%. As a group, “Specialized REITs” companies have a potential upside of 13.47%. Given Corrections Corp. of America’s stronger consensus rating and higher probable upside, analysts plainly believe Corrections Corp. of America is more favorable than its peers.

Institutional & Insider Ownership

86.2% of Corrections Corp. of America shares are owned by institutional investors. Comparatively, 64.6% of shares of all “Specialized REITs” companies are owned by institutional investors. 1.3% of Corrections Corp. of America shares are owned by company insiders. Comparatively, 6.4% of shares of all “Specialized REITs” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Corrections Corp. of America pays an annual dividend of $1.68 per share and has a dividend yield of 6.6%. 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. As a group, “Specialized REITs” companies pay a dividend yield of 4.3% and pay out 169.6% of their earnings in the form of a dividend. Corrections Corp. of America has increased its dividend for 4 consecutive years. Corrections Corp. of America is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Volatility & Risk

Corrections Corp. of America has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500. Comparatively, Corrections Corp. of America’s peers have a beta of 0.85, meaning that their average stock price is 15% less volatile than the S&P 500.

Summary

Corrections Corp. of America beats its peers on 10 of the 15 factors compared.

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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