Gladstone Commercial (NASDAQ:GOOD) vs. CoreCivic (NYSE:CXW) Critical Survey

CoreCivic (NYSE:CXW) and Gladstone Commercial (NASDAQ:GOOD) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, analyst recommendations, profitability, earnings and valuation.

Risk and Volatility

CoreCivic has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, Gladstone Commercial has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.

Insider and Institutional Ownership

85.1% of CoreCivic shares are held by institutional investors. Comparatively, 45.5% of Gladstone Commercial shares are held by institutional investors. 2.3% of CoreCivic shares are held by company insiders. Comparatively, 1.4% of Gladstone Commercial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares CoreCivic and Gladstone Commercial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CoreCivic	5.21%	7.12%	3.54%
Gladstone Commercial	18.67%	16.37%	2.52%

Dividends

CoreCivic pays an annual dividend of $1.76 per share and has a dividend yield of 10.9%. Gladstone Commercial pays an annual dividend of $1.20 per share and has a dividend yield of 11.1%. CoreCivic pays out 177.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Gladstone Commercial pays out 666.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for CoreCivic and Gladstone Commercial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CoreCivic	0	1	3	0	2.75
Gladstone Commercial	1	1	0	0	1.50

CoreCivic currently has a consensus target price of $34.00, suggesting a potential upside of 110.38%. Gladstone Commercial has a consensus target price of $13.00, suggesting a potential upside of 19.87%. Given CoreCivic’s stronger consensus rating and higher possible upside, analysts plainly believe CoreCivic is more favorable than Gladstone Commercial.

Earnings & Valuation

This table compares CoreCivic and Gladstone Commercial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CoreCivic	$2.09 billion	0.81	$68.87 million	$0.99	16.32
Gladstone Commercial	$155.25 million	3.38	$24.00 million	$0.18	60.25

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

Summary

CoreCivic beats Gladstone Commercial on 10 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 Gladstone Commercial

Gladstone Commercial Corporation is a real estate investment trust focused on acquiring, owning, and operating net leased industrial and office properties across the United States. Including payments through January 2024, Gladstone Commercial has paid 229 consecutive monthly cash distributions on its common stock. Prior to paying distributions on a monthly basis, Gladstone Commercial paid five consecutive quarterly cash distributions. Gladstone Commercial has never skipped or deferred a distribution since its inception in 2003.