Head-To-Head Review: American Tower (AMT) vs. The GEO Group (GEO)

The GEO Group (NYSE: GEO) and American Tower (NYSE:AMT) are both mid-cap financials companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, risk, valuation and analyst recommendations.

Dividends

The GEO Group pays an annual dividend of $1.88 per share and has a dividend yield of 7.6%. American Tower pays an annual dividend of $2.64 per share and has a dividend yield of 1.9%. The GEO Group pays out 138.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Tower pays out 100.4% 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 raised its dividend for 5 consecutive years and American Tower has raised its dividend for 4 consecutive years. The GEO Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

The GEO Group has a beta of 1.49, meaning that its stock price is 49% more volatile than the S&P 500. Comparatively, American Tower has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for The GEO Group and American Tower, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The GEO Group 0 1 2 0 2.67
American Tower 0 0 13 0 3.00

The GEO Group presently has a consensus target price of $33.78, indicating a potential upside of 37.03%. American Tower has a consensus target price of $158.00, indicating a potential upside of 11.42%. Given The GEO Group’s higher probable upside, research analysts clearly believe The GEO Group is more favorable than American Tower.

Earnings & Valuation

This table compares The GEO Group and American Tower’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
The GEO Group $2.18 billion 1.40 $148.71 million $1.36 18.13
American Tower $5.79 billion 10.51 $956.42 million $2.63 53.92

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

Insider & Institutional Ownership

95.8% of The GEO Group shares are held by institutional investors. Comparatively, 91.9% of American Tower shares are held by institutional investors. 2.4% of The GEO Group shares are held by insiders. Comparatively, 0.9% of American Tower shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares The GEO Group and American Tower’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The GEO Group 7.05% 14.85% 4.17%
American Tower 18.63% 16.98% 3.80%

Summary

American Tower beats The GEO Group on 10 of the 17 factors compared between the two stocks.

The GEO Group 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.

American Tower Company Profile

American Tower Corporation (ATC) is a holding company. The Company operates as a real estate investment trust (REIT), which owns, operates and develops multitenant communications real estate. ATC’s segments include U.S. property, Asia property, EMEA property, Latin America property, Services and Other. Its primary business is property operations, which include the leasing of space on communications sites to wireless service providers, radio and television broadcast companies, wireless data providers, government agencies and municipalities, and tenants in various other industries. Its U.S. property segment includes operations in the United States. Its Asia property segment includes operations in India. The EMEA property segment includes operations in Germany, Ghana, Nigeria, South Africa and Uganda. The Latin America property segment includes operations in Brazil, Chile, Colombia, Costa Rica, Mexico and Peru. Its services segment offers tower-related services in the United States.

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