Movers and SHAKERS
Thursday, June 18, 2020
Suspends Dividend; Evaluating Corporate Structure and Capital Allocation
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.
Business Evaluation. Yesterday, CoreCivic announced that it is evaluating corporate structure and capital allocation alternatives. We interpret this to mean a potential move away from the REIT structure to a regular "C" corporate structure. The Company expects to finalize its evaluation by the end of the third quarter.
Suspending Dividend. In addition, CoreCivic suspended its quarterly dividend. According to management, the Company does expect to maintain its REIT status for 2020 given reduced required distributions under the CARES Act. Suspension of the dividend frees up roughly $53 million quarterly. Depending on the outcome of...
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.