Head-To-Head Review: Farmland Partners (FPI) & Geo Group Inc (The) (GEO)

Farmland Partners (NYSE: FPI) and Geo Group Inc (The) (NYSE:GEO) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, dividends, valuation, profitability and analyst recommendations.

Dividends

Farmland Partners pays an annual dividend of $0.51 per share and has a dividend yield of 5.7%. Geo Group Inc (The) pays an annual dividend of $1.88 per share and has a dividend yield of 7.3%. Farmland Partners pays out 268.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Geo Group Inc (The) pays out 139.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Farmland Partners has raised its dividend for 2 consecutive years and Geo Group Inc (The) has raised its dividend for 4 consecutive years. Geo Group Inc (The) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Farmland Partners $31.00 million 9.40 $4.30 million $0.19 47.42
Geo Group Inc (The) $2.18 billion 1.46 $148.71 million $1.35 19.04

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Farmland Partners and Geo Group Inc (The), as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Farmland Partners 0 5 1 0 2.17
Geo Group Inc (The) 0 2 2 0 2.50

Farmland Partners presently has a consensus target price of $9.95, indicating a potential upside of 10.43%. Geo Group Inc (The) has a consensus target price of $33.78, indicating a potential upside of 31.38%. Given Geo Group Inc (The)’s stronger consensus rating and higher probable upside, analysts plainly believe Geo Group Inc (The) is more favorable than Farmland Partners.

Profitability

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

Net Margins Return on Equity Return on Assets
Farmland Partners 15.89% 2.05% 0.74%
Geo Group Inc (The) 7.05% 14.85% 4.17%

Insider and Institutional Ownership

39.7% of Farmland Partners shares are held by institutional investors. Comparatively, 95.8% of Geo Group Inc (The) shares are held by institutional investors. 2.8% of Farmland Partners 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 hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility & Risk

Farmland Partners has a beta of 0.17, meaning that its stock price is 83% less volatile than the S&P 500. Comparatively, Geo Group Inc (The) has a beta of 1.52, meaning that its stock price is 52% more volatile than the S&P 500.

Summary

Geo Group Inc (The) beats Farmland Partners on 13 of the 17 factors compared between the two stocks.

Farmland Partners Company Profile

Farmland Partners, Inc. is an internally managed real estate company. The Company owns and seeks to acquire farmland located in agricultural markets throughout North America. The Company is the sole member of the general partner of Farmland Partners Operating Partnership, LP (the Operating Partnership). All of the Company’s assets are held by, and its operations are primarily conducted through, the Operating Partnership and the subsidiaries of the Operating Partnership. The Company’s principal investment focus is on farmland located in agricultural markets throughout North America, however, it may seek to acquire farmland outside of North America. It also may acquire properties related to farming, such as grain storage facilities, grain elevators, feedlots, cold storage facilities, processing plants and distribution centers, as well as livestock farms or ranches. As of December 31, 2016, the Company owned approximately 115,489 acres, as well as eight grain storage facilities.

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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