The GEO Group (NYSE:GEO) and Host Hotels and Resorts (NYSE:HST) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.
Risk & Volatility
The GEO Group has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, Host Hotels and Resorts has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500.
The GEO Group pays an annual dividend of $1.88 per share and has a dividend yield of 8.6%. Host Hotels and Resorts pays an annual dividend of $0.80 per share and has a dividend yield of 4.2%. The GEO Group pays out 73.7% of its earnings in the form of a dividend. Host Hotels and Resorts pays out 47.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. The GEO Group has increased its dividend for 5 consecutive years. The GEO Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings & Valuation
This table compares The GEO Group and Host Hotels and Resorts’ 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||1.18||$146.24 million||$2.55||8.60|
|Host Hotels and Resorts||$5.39 billion||2.60||$564.00 million||$1.69||11.18|
Host Hotels and Resorts has higher revenue and earnings than The GEO Group. The GEO Group is trading at a lower price-to-earnings ratio than Host Hotels and Resorts, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
92.6% of The GEO Group shares are owned by institutional investors. Comparatively, 99.4% of Host Hotels and Resorts shares are owned by institutional investors. 36.5% of The GEO Group shares are owned by insiders. Comparatively, 1.4% of Host Hotels and Resorts shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This table compares The GEO Group and Host Hotels and Resorts’ 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%|
|Host Hotels and Resorts||15.91%||12.21%||7.30%|
This is a breakdown of current ratings and recommmendations for The GEO Group and Host Hotels and Resorts, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|The GEO Group||0||0||1||0||3.00|
|Host Hotels and Resorts||1||4||9||0||2.57|
The GEO Group currently has a consensus target price of $32.00, indicating a potential upside of 45.85%. Host Hotels and Resorts has a consensus target price of $21.85, indicating a potential upside of 15.59%. Given The GEO Group’s stronger consensus rating and higher probable upside, research analysts clearly believe The GEO Group is more favorable than Host Hotels and Resorts.
Host Hotels and Resorts beats The GEO Group on 10 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 ("REIT") 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 139 facilities totaling approximately 96,000 beds, including projects under development, with a growing workforce of approximately 23,000 professionals.
About Host Hotels and Resorts
Host Hotels & Resorts, Inc. is an S&P 500 company and is the largest lodging real estate investment trust and one of the largest owners of luxury and upper-upscale hotels. The Company currently owns 89 properties in the United States and six properties internationally totaling approximately 52,500 rooms. The Company also holds non-controlling interests in seven domestic and international joint ventures. Guided by a disciplined approach to capital allocation and aggressive asset management, the Company partners with premium brands such as Marriott, Ritz-Carlton, Westin, Sheraton, St. Regis, Le Méridien, The Luxury Collection, Hyatt, Fairmont, Hilton, Swissôtel, ibis and Novotel, as well as independent brands in the operation of properties in over 50 major markets.
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