Monday, August 10, 2020

The GEO Group, Inc. (GEO)

Retaining REIT Status, but Cutting Dividend, Focus on Reducing Debt

With over 94,000 beds owned, leased or managed across its business lines and serving over 260,000 people daily, GEO is a leading provider of mission critical real estate to its governmental partners. The Company is the first fully integrated equity REIT specializing in the design, financing, development, and operation of secure facilities, processing centers, and community reentry centers in the U.S., Australia, South Africa, and the U.K.

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

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

2Q20 Results. GEO reported second quarter revenue of $587.8 million, EPS of $0.31, and AFFO of $0.66. In the same period last year, the Company reported revenue of $613.9 million, EPS of $0.35, and AFFO of $0.70. While above management expectations, results were negatively impacted by the COVID crisis, which reduced populations and increased costs. We had estimated revenue of $585 million, EPS of $0.26, and AFFO of $0.57.

Retaining REIT Status but Cutting Dividend. GEO has determined to maintain its REIT status, although the Company announced a dividend cut to a projected annual $1.36 per share, down from the previous $1.92. Even at the reduced rate, the yield is still ...

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.