Critical Review: EastGroup Properties (NYSE:EGP) & CoreCivic (NYSE:CXW)

CoreCivic (NYSE:CXW) and EastGroup Properties (NYSE:EGP) are both mid-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, profitability, institutional ownership, analyst recommendations, dividends and earnings.

Volatility and Risk

CoreCivic has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500. Comparatively, EastGroup Properties has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.

Valuation & Earnings

This table compares CoreCivic and EastGroup Properties”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CoreCivic	$1.97 billion	1.18	$67.59 million	$0.67	31.55
EastGroup Properties	$570.59 million	14.98	$200.49 million	$4.84	35.67

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

Dividends

CoreCivic pays an annual dividend of $1.76 per share and has a dividend yield of 8.3%. EastGroup Properties pays an annual dividend of $5.60 per share and has a dividend yield of 3.2%. CoreCivic pays out 262.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EastGroup Properties pays out 115.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares CoreCivic and EastGroup Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CoreCivic	3.85%	6.55%	3.20%
EastGroup Properties	37.19%	8.56%	5.01%

Institutional & Insider Ownership

85.1% of CoreCivic shares are owned by institutional investors. Comparatively, 92.1% of EastGroup Properties shares are owned by institutional investors. 1.9% of CoreCivic shares are owned by insiders. Comparatively, 1.0% of EastGroup Properties shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for CoreCivic and EastGroup Properties, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CoreCivic	0	2	1	0	2.33
EastGroup Properties	0	6	8	0	2.57

CoreCivic currently has a consensus target price of $23.00, indicating a potential upside of 8.80%. EastGroup Properties has a consensus target price of $191.21, indicating a potential upside of 10.75%. Given EastGroup Properties’ stronger consensus rating and higher probable upside, analysts plainly believe EastGroup Properties is more favorable than CoreCivic.

Summary

EastGroup Properties beats CoreCivic on 13 of the 16 factors compared between the two stocks.

About CoreCivic

CoreCivic, Inc. owns and operates partnership correctional, detention, and residential reentry facilities in the United States. It operates through three segments: CoreCivic Safety, CoreCivic Community, and CoreCivic Properties. The company provides a range of solutions to government partners that serve the public good through corrections and detention management, a network of residential reentry centers to help address America’s recidivism crisis, and government real estate solutions. Its correctional, detention, and residential reentry facilities offer rehabilitation and educational programs, including basic education, faith-based services, life skills and employment training, and substance abuse treatment. The company owns and operates correctional and detention facilities, residential reentry centers, and properties for lease. CoreCivic, Inc. was founded in 1983 and is based in Brentwood, Tennessee.

About EastGroup Properties

EastGroup Properties, Inc. (NYSE: EGP), a member of the S&P Mid-Cap 400 and Russell 1000 Indexes, is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina. The Company's goal is to maximize shareholder value by being a leading provider in its markets of functional, flexible and quality business distribution space for location sensitive customers (primarily in the 20,000 to 100,000 square foot range). The Company's strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets. The Company's portfolio, including development projects and value-add acquisitions in lease-up and under construction, currently includes approximately 59 million square feet.