Analyzing PS Business Parks (NYSE:PSB) and Corecivic (NYSE:CXW)

PS Business Parks (NYSE:PSB) and Corecivic (NYSE:CXW) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Profitability

This table compares PS Business Parks and Corecivic’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PS Business Parks 46.31% 18.97% 9.36%
Corecivic 9.09% 12.72% 5.06%

Valuation and Earnings

This table compares PS Business Parks and Corecivic’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PS Business Parks $413.52 million 11.40 $226.70 million $6.47 26.57
Corecivic $1.84 billion 1.08 $159.21 million $2.31 7.20

PS Business Parks has higher earnings, but lower revenue than Corecivic. Corecivic is trading at a lower price-to-earnings ratio than PS Business Parks, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

71.5% of PS Business Parks shares are held by institutional investors. Comparatively, 80.7% of Corecivic shares are held by institutional investors. 1.5% of PS Business Parks shares are held by insiders. Comparatively, 1.2% of Corecivic shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for PS Business Parks and Corecivic, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PS Business Parks 1 1 0 0 1.50
Corecivic 0 1 0 0 2.00

PS Business Parks presently has a consensus target price of $132.00, indicating a potential downside of 23.22%. Corecivic has a consensus target price of $24.00, indicating a potential upside of 44.32%. Given Corecivic’s stronger consensus rating and higher probable upside, analysts clearly believe Corecivic is more favorable than PS Business Parks.

Risk and Volatility

PS Business Parks has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500. Comparatively, Corecivic has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500.

Dividends

PS Business Parks pays an annual dividend of $4.20 per share and has a dividend yield of 2.4%. Corecivic pays an annual dividend of $1.76 per share and has a dividend yield of 10.6%. PS Business Parks pays out 64.9% of its earnings in the form of a dividend. Corecivic pays out 76.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PS Business Parks has increased its dividend for 5 consecutive years.

Summary

PS Business Parks beats Corecivic on 10 of the 16 factors compared between the two stocks.

PS Business Parks Company Profile

PS Business Parks, Inc., a member of the S&P SmallCap 600, is a REIT that acquires, develops, owns and operates commercial properties, primarily multi-tenant industrial, flex and office space. As of December 31, 2018, the Company wholly owned 28.2 million rentable square feet with approximately 5,050 commercial customers in six states and held a 95.0% interest in a 395-unit apartment complex.

Corecivic Company Profile

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 (REIT) 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.

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