Movers and SHAKERS
Thursday, August 6, 2020
Ditching REIT Status; 2Q Results In-Line
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.
REIT Status. Likely to no one's surprise, CoreCivic announced it is ditching its REIT status and converting to a C-Corp at year-end. We believe management took this step to address three key items: the chronic undervaluation of the stock, access to capital, and the opportunity to further diversify the operating model into services not permitted under the REIT construct. Cash dividends have been discontinued for the rest of the year.
Go Forward Capital Allocation. The near-term goal is to reduce leverage to 2.25x-2.75x from 4.2x at quarter's end. Following debt reduction is the return of capital to shareholders, either in buybacks (recall the Company repurchased $500 million over the 2009-2011 time frame) or possibly a new dividend. Finally, we expect ...
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.