Movers and SHAKERS
Monday, May 11, 2020
Dealing With COVID-19 Challenges
CoreCivic Inc through its subsidiaries operates as a diversified Corrections Corporation of America, or CCA is a real estate investment trust involved in the ownership and operation of private prisons. CCA mainly controls medium-security correctional and detention facilities located throughout the U.S. The company derives the vast majority of its income in the form of management revenue from medium-term contracts. CCA is compensated on a per diem rate based on the bed capacity and range of services offered at its facilities. Total revenue for the company is split fairly evenly between contracts with federal agencies, such as the Federal Bureau of Prisons and US Marshals Service, and state entities, such as the State of California Department of Corrections and Rehabilitation.
Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
1Q20 Results. First quarter was performing in-line with management expectations until the COVID crisis hit, forcing the Company to devote significant resources to combat the disease. In addition, an already expected ICE population decline was exacerbated.
What about the Dividend? We believe the dividend remains covered even under our revised estimates, although we will note that management did lower the dividend in 2016 as a result of changes to the South Texas contract. Another alternative to cash dividends would be paying up to 80% of the dividend in stock, although we are not...
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.