NYSE:GEO

Stock Analysis Report

Executive Summary

The GEO Group (NYSE: GEO) is the first fully integrated equity real estate investment trust specializing in the design, financing, development, and operation of secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom.

Rewards

Trading at 70.9% below its fair value

Earnings grew by 9.4% over the past year

Risk Analysis

Unstable dividend track record

Highly volatile share price over past 3 months



Snowflake Analysis

Undervalued with solid track record.


Similar Companies

Share Price & News

How has GEO Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: GEO's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

8.7%

GEO

-3.1%

US REITs

0.8%

US Market


1 Year Return

-34.8%

GEO

13.0%

US REITs

22.0%

US Market

Return vs Industry: GEO underperformed the US REITs industry which returned 13% over the past year.

Return vs Market: GEO underperformed the US Market which returned 22% over the past year.


Shareholder returns

GEOIndustryMarket
7 Day8.7%-3.1%0.8%
30 Day1.2%-3.0%1.7%
90 Day-19.5%-3.2%5.2%
1 Year-27.9%-34.8%17.7%13.0%24.7%22.0%
3 Year-18.6%-36.4%31.3%14.8%46.9%37.3%
5 Year-16.3%-44.4%48.4%17.6%65.5%47.3%

Price Volatility Vs. Market

How volatile is GEO Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is GEO Group undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: GEO ($14.66) is trading below our estimate of fair value ($50.33)

Significantly Below Fair Value: GEO is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: GEO is good value based on its PE Ratio (10.8x) compared to the REITs industry average (36.8x).

PE vs Market: GEO is good value based on its PE Ratio (10.8x) compared to the US market (18.6x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate GEO's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: GEO is good value based on its PB Ratio (1.7x) compared to the US REITs industry average (1.9x).


Next Steps

Future Growth

How is GEO Group forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

7.5%

Forecasted Real Estate industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as GEO Group has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has GEO Group performed over the past 5 years?

2.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GEO has high quality earnings.

Growing Profit Margin: GEO's current net profit margins (6.6%) are higher than last year (6.4%).


Past Earnings Growth Analysis

Earnings Trend: GEO's earnings have grown by 2.5% per year over the past 5 years.

Accelerating Growth: GEO's earnings growth over the past year (9.4%) exceeds its 5-year average (2.5% per year).

Earnings vs Industry: GEO earnings growth over the past year (9.4%) exceeded the REITs industry 8.3%.


Return on Equity

High ROE: GEO's Return on Equity (16.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is GEO Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: GEO has a high level of physical assets or inventory.

Debt Coverage by Assets: GEO's debt is not covered by short term assets (assets are 0.2x debt).


Financial Institutions Analysis

Asset Level: GEO's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if GEO has a sufficient allowance for bad loans.

Low Risk Liabilities: GEO reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if GEO has an acceptable proportion of non-loan assets held.

Low Risk Deposits: GEO has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if GEO has an appropriate level of bad loans.


Next Steps

Dividend

What is GEO Group's current dividend yield, its reliability and sustainability?

13.10%

Current Dividend Yield


Dividend Yield vs Market

company13.1%marketbottom25%1.4%markettop25%3.7%industryaverage3.8%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: GEO's dividend (13.1%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: GEO's dividend (13.1%) is in the top 25% of dividend payers in the US market (3.71%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, GEO has been paying a dividend for less than 10 years.

Growing Dividend: GEO's dividend payments have increased, but the company has only paid a dividend for 8 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (97.2%), GEO's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of GEO Group's salary, the management and board of directors tenure and is there insider trading?

7.9yrs

Average management tenure


CEO

George Zoley (69yo)

25.9yrs

Tenure

US$6,963,460

Compensation

Mr. George C. Zoley, Ph.D., Founded The Geo Group, Inc. (formerly known as Wackenhut Corrections Corp.) in 1984 and has been its Chairman and Chief Executive Officer since May 2002 and April 1994 respectiv ...


CEO Compensation Analysis

Compensation vs Market: George's total compensation ($USD6.96M) is above average for companies of similar size in the US market ($USD3.87M).

Compensation vs Earnings: George's compensation has been consistent with company performance over the past year.


Management Age and Tenure

7.9yrs

Average Tenure

57yo

Average Age

Experienced Management: GEO's management team is seasoned and experienced (7.9 years average tenure).


Board Age and Tenure

5.4yrs

Average Tenure

69yo

Average Age

Experienced Board: GEO's board of directors are considered experienced (5.4 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$137,93405 Sep 19
Anne Foreman
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares8,000
Max PriceUS$17.24
SellUS$29,45513 Aug 19
Richard Glanton
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares1,663
Max PriceUS$17.71
SellUS$51,34321 May 19
Richard Glanton
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares2,400
Max PriceUS$21.39
SellUS$21,25311 Mar 19
Richard Glanton
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares1,000
Max PriceUS$21.25

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • George Zoley (69yo)

    Founder

    • Tenure: 25.9yrs
    • Compensation: US$6.96m
  • Pablo Paez (38yo)

    Executive Vice President

    • Tenure: 0yrs
  • Brian Evans (51yo)

    Senior VP & CFO

    • Tenure: 10.3yrs
    • Compensation: US$2.22m
  • Amber Martin

    Executive Vice President of Contract Administration

    • Tenure: 0yrs
  • Ronald Brack (57yo)

    Executive VP

    • Tenure: 10.3yrs
  • Dave Donahue (59yo)

    Senior VP & President of GEO Secure Services

    • Tenure: 3.9yrs
    • Compensation: US$2.03m
  • Ann Schlarb (54yo)

    Senior VP & President of GEO Care

    • Tenure: 5.4yrs
    • Compensation: US$1.63m
  • Joe Negron (57yo)

    Senior VP

    • Tenure: 0.9yrs
  • Jose Rosario

    Executive VP

    • Tenure: 0yrs
  • Christopher Ryan

    Executive Vice President of Human Resources

    • Tenure: 0yrs

Board Members

  • George Zoley (69yo)

    Founder

    • Tenure: 25.9yrs
    • Compensation: US$6.96m
  • Richard Glanton (72yo)

    Lead Independent Director

    • Tenure: 8.9yrs
    • Compensation: US$430.70k
  • Anne Foreman (71yo)

    Independent Director

    • Tenure: 17.9yrs
    • Compensation: US$268.20k
  • Norman Carlson (85yo)

    Director Emeritus

    • Tenure: 4.9yrs
    • Compensation: US$50.00k
  • Chris Wheeler (72yo)

    Independent Director

    • Tenure: 9.8yrs
    • Compensation: US$294.21k
  • Guido Van Hauwermeiren (57yo)

    Director

    • Tenure: 1.4yrs
    • Compensation: US$194.17k
  • Jose Gordo (45yo)

    Director

    • Tenure: 0.2yrs
  • Julie Wood (49yo)

    Independent Director

    • Tenure: 5.4yrs
    • Compensation: US$257.20k
  • Scott Kernan (58yo)

    Director

    • Tenure: 1.3yrs
    • Compensation: US$157.80k

Company Information

The GEO Group, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The GEO Group, Inc.
  • Ticker: GEO
  • Exchange: NYSE
  • Founded: 1984
  • Industry: Specialized REITs
  • Sector: Real Estate
  • Market Cap: US$1.748b
  • Shares outstanding: 119.22m
  • Website: https://www.geogroup.com

Number of Employees


Location

  • The GEO Group, Inc.
  • 4955 Technology Way
  • Boca Raton
  • Florida
  • 33431
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GEGDB (Deutsche Boerse AG)COM USD0.01 NEWDEEURNo data
GEONYSE (New York Stock Exchange)YesCommon StockUSUSDJul 1994
GEGDB (Deutsche Boerse AG)YesCommon StockDEEURJul 1994

Biography

The GEO Group (NYSE: GEO) is the first fully integrated equity real estate investment trust specializing in the design, financing, development, and operation of secure facilities, processing centers, and c ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/15 23:56
End of Day Share Price2019/12/13 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.