The GEO Group (GEO) and Healthcare Realty Trust (HR) Critical Comparison

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

Profitability

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

Net Margins Return on Equity Return on Assets
The GEO Group 6.43% 14.63% 3.91%
Healthcare Realty Trust 3.66% 0.92% 0.51%

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
The GEO Group $2.26 billion 1.17 $146.24 million $2.55 8.55
Healthcare Realty Trust $424.50 million 8.75 $23.09 million $1.53 19.39

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

Institutional and Insider Ownership

88.5% of The GEO Group shares are held by institutional investors. Comparatively, 96.5% of Healthcare Realty Trust shares are held by institutional investors. 36.5% of The GEO Group shares are held by insiders. Comparatively, 1.8% of Healthcare Realty Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

The GEO Group has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500. Comparatively, Healthcare Realty Trust has a beta of 0.39, indicating that its stock price is 61% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for The GEO Group and Healthcare Realty Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The GEO Group 0 1 1 0 2.50
Healthcare Realty Trust 0 7 2 0 2.22

The GEO Group presently has a consensus target price of $28.50, suggesting a potential upside of 30.73%. Healthcare Realty Trust has a consensus target price of $30.43, suggesting a potential upside of 2.56%. Given The GEO Group’s stronger consensus rating and higher probable upside, equities analysts clearly believe The GEO Group is more favorable than Healthcare Realty Trust.

Dividends

The GEO Group pays an annual dividend of $1.88 per share and has a dividend yield of 8.6%. Healthcare Realty Trust pays an annual dividend of $1.20 per share and has a dividend yield of 4.0%. The GEO Group pays out 73.7% of its earnings in the form of a dividend. Healthcare Realty Trust pays out 78.4% 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 increased its dividend for 6 consecutive years. The GEO Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

The GEO Group beats Healthcare Realty Trust on 13 of the 17 factors compared between the two stocks.

About The GEO Group

The GEO Group, Inc. (NYSE: GEO) is the first fully integrated equity real estate investment trust specializing in the design, financing, development, and operation of correctional, detention, and community reentry facilities around the globe. GEO is the world's leading provider of diversified correctional, detention, community reentry, and electronic monitoring services to government agencies worldwide with operations in the United States, Australia, South Africa, and the United Kingdom. GEO's worldwide operations include the ownership and/or management of 136 facilities totaling approximately 96,000 beds, including projects under development, with a growing workforce of approximately 23,000 professionals.

About Healthcare Realty Trust

Healthcare Realty Trust is a real estate investment trust that integrates owning, managing, financing and developing income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States. As of September 30, 2018, the Company owned 201 real estate properties in 27 states totaling 14.8 million square feet and was valued at approximately $5.0 billion. The Company provided leasing and property management services to 11.1 million square feet nationwide.

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