Analyzing Uniti Group (UNIT) and The GEO Group (GEO)

Uniti Group (NASDAQ: UNIT) and The GEO Group (NYSE:GEO) are both mid-cap financials companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, profitability, institutional ownership, analyst recommendations, risk and valuation.

Profitability

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

Net Margins Return on Equity Return on Assets
Uniti Group -4.32% N/A -1.01%
The GEO Group 7.05% 14.85% 4.17%

Dividends

Uniti Group pays an annual dividend of $2.40 per share and has a dividend yield of 13.4%. The GEO Group pays an annual dividend of $1.88 per share and has a dividend yield of 8.0%. Uniti Group pays out -888.9% of its earnings in the form of a dividend. The GEO Group 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. The GEO Group has raised its dividend for 4 consecutive years. Uniti Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Uniti Group $770.41 million 4.08 -$210,000.00 ($0.27) -66.37
The GEO Group $2.18 billion 1.34 $148.71 million $1.35 17.46

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

Insider & Institutional Ownership

70.0% of Uniti Group shares are held by institutional investors. Comparatively, 95.6% of The GEO Group shares are held by institutional investors. 0.4% of Uniti Group shares are held by company insiders. Comparatively, 2.4% of The GEO Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Uniti Group and The GEO Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Uniti Group 0 3 5 0 2.63
The GEO Group 0 1 2 0 2.67

Uniti Group presently has a consensus price target of $26.67, suggesting a potential upside of 48.81%. The GEO Group has a consensus price target of $33.78, suggesting a potential upside of 43.30%. Given Uniti Group’s higher probable upside, research analysts clearly believe Uniti Group is more favorable than The GEO Group.

Summary

The GEO Group beats Uniti Group on 11 of the 16 factors compared between the two stocks.

About Uniti Group

Uniti Group Inc., formerly Communications Sales & Leasing, Inc., is an internally managed real estate investment trust engaged in the acquisition and construction of infrastructure in the communications industry. The Company focuses on acquiring and constructing fiber optic broadband networks, wireless communications towers, copper and coaxial broadband networks and data centers. It operates in four segments: Leasing, Fiber Infrastructure, Towers and Consumer Competitive Local Exchange Carrier (Consumer CLEC). The Leasing segment includes Uniti Leasing. The Fiber Infrastructure segment includes Uniti Fiber business. The Towers segment includes Uniti Towers and its ground lease investments. The Consumer CLEC segment includes Talk America. As of July 3, 2017, the Company and its subsidiaries owned approximately 88,100 fiber network route miles, representing approximately 4.8 million fiber strand miles and approximately 231,900 route miles of copper cable lines across 32 states.

About The GEO Group

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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