Thursday, August 13, 2020

CoreCivic (CXW)

Deeper Dive into 2Q Results and C-Corp Announcement

CoreCivic is a diversified government solutions company with the scale and experience needed to solve tough government challenges in flexible, cost-effective ways. We provide a broad range of solutions to government partners that serve the public good through corrections and detention management, a growing network of residential reentry centers to help address America’s recidivism crisis, and government real estate solutions. We are a publicly traded real estate investment trust and the nation’s largest owner of partnership correctional, detention and residential reentry facilities. We also believe we are the largest private owner of real estate used by U.S. government agencies. The Company has been a flexible and dependable partner for government for more than 35 years. Our employees are driven by a deep sense of service, high standards of professionalism and a responsibility to help government better the public good.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

C-Corp Election. As noted in our Friday update, CoreCivic has elected to switch to a C-Corp beginning January 1, 2020. Dividends have been suspended. As a C-corp, the Company will be subject to taxes but management is confident the switch will enable the Company to pay down debt faster, provide financial flexibility, potentially lower its cost of capital, enable the Company to repurchase shares, and provide CoreCivic access to growth channels previously unavailable under the REIT construct.




For Shareholders? Obviously, for dividend seeking shareholders, the announcement removes a key pillar for holding the shares. Since the June 17th initial announcement, nearly 60% of CXW's shares have changed hands, suggesting the worst of the turnover may be behind the Company. Without a dividend, shareholders will be looking for ...

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.