Critical Review: Vestis (NYSE:VSTS) and Geo Group (NYSE:GEO)

Geo Group (NYSE:GEO) and Vestis (NYSE:VSTS) are both industrials companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, risk, profitability, analyst recommendations, institutional ownership and valuation.

Valuation and Earnings

This table compares Geo Group and Vestis”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Geo Group	$2.63 billion	1.40	$254.37 million	$2.12	13.17
Vestis	$2.73 billion	0.70	-$40.22 million	($0.05)	-289.26

Geo Group has higher earnings, but lower revenue than Vestis. Vestis is trading at a lower price-to-earnings ratio than Geo Group, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Geo Group has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, Vestis has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Geo Group and Vestis, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Geo Group	0	1	4	1	3.00
Vestis	4	3	1	0	1.62

Geo Group presently has a consensus price target of $40.00, suggesting a potential upside of 43.21%. Vestis has a consensus price target of $12.66, suggesting a potential downside of 12.47%. Given Geo Group’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Geo Group is more favorable than Vestis.

Profitability

This table compares Geo Group and Vestis’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Geo Group	10.31%	10.42%	4.14%
Vestis	-0.20%	7.27%	2.20%

Institutional & Insider Ownership

76.1% of Geo Group shares are owned by institutional investors. Comparatively, 97.4% of Vestis shares are owned by institutional investors. 5.0% of Geo Group shares are owned by company insiders. Comparatively, 15.7% of Vestis shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Geo Group beats Vestis on 11 of the 15 factors compared between the two stocks.

About Geo Group

The GEO Group, Inc. (NYSE: GEO) engages in ownership, leasing, and management of secure facilities, processing centers, and community-based reentry facilities in the United States, Australia, the United Kingdom, and South Africa. The company also provides secure facility management services, including the provision of security, administrative, rehabilitation, education, and food services; reentry services, such as temporary housing, programming, employment assistance, and other services; electronic monitoring and supervision services; and transportation services; as well as designs, constructs, and finances new facilities through projects. The company was founded in 1984 and is based in Boca Raton, Florida.

About Vestis

Vestis Corporation provides uniform rentals and workplace supplies in the United States and Canada. Its products include uniform options, such as shirts, pants, outerwear, gowns, scrubs, high visibility garments, particulate-free garments, and flame-resistant garments, as well as shoes and accessories; and workplace supplies, including managed restroom supply services, first-aid supplies and safety products, floor mats, towels, and linens. The company serves manufacturing, hospitality, retail, food processing, food service, pharmaceuticals, healthcare, automotive, and cleanroom industries. Vestis Corporation was founded in 1936 and is headquartered in Roswell, Georgia.