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

Volatility and Risk

Corrections Corp. of America has a beta of 0.92, meaning that its share 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 share price is 15% less volatile than the S&P 500.

Institutional & Insider Ownership

86.2% of Corrections Corp. of America shares are held by institutional investors. Comparatively, 64.6% of shares of all “Specialized REITs” companies are held by institutional investors. 1.3% of Corrections Corp. of America shares are held by insiders. Comparatively, 6.4% of shares of all “Specialized REITs” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

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 36.41% 8.84% 3.25%

Dividends

Corrections Corp. of America pays an annual dividend of $1.68 per share and has a dividend yield of 6.4%. 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 170.4% of their earnings in the form of a dividend. Corrections Corp. of America has raised 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.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Corrections Corp. of America and its peers, as reported by MarketBeat.

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 26 206 552 20 2.70

Corrections Corp. of America currently has a consensus target price of $36.00, suggesting a potential upside of 37.46%. As a group, “Specialized REITs” companies have a potential upside of 11.44%. Given Corrections Corp. of America’s stronger consensus rating and higher possible upside, equities analysts clearly believe Corrections Corp. of America is more favorable than its peers.

Valuation and Earnings

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

Gross Revenue EBITDA Price/Earnings Ratio
Corrections Corp. of America $1.82 billion $452.80 million 14.63
Corrections Corp. of America Competitors $1.00 billion $531.02 million 29.24

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.

Summary

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

About Corrections Corp. of America

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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