The GEO Group (GEO) vs. Invesco Mortgage Capital (IVR) Critical Survey

The GEO Group (NYSE:GEO) and Invesco Mortgage Capital (NYSE:IVR) are both mid-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, profitability, institutional ownership and earnings.

Analyst Ratings

This is a breakdown of current recommendations and price targets for The GEO Group and Invesco Mortgage Capital, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The GEO Group 0 2 0 0 2.00
Invesco Mortgage Capital 0 2 0 0 2.00

The GEO Group currently has a consensus target price of $25.50, suggesting a potential upside of 15.33%. Invesco Mortgage Capital has a consensus target price of $15.50, suggesting a potential downside of 3.31%. Given The GEO Group’s higher probable upside, research analysts clearly believe The GEO Group is more favorable than Invesco Mortgage Capital.

Volatility and Risk

The GEO Group has a beta of 1.47, suggesting that its stock price is 47% more volatile than the S&P 500. Comparatively, Invesco Mortgage Capital has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500.

Dividends

The GEO Group pays an annual dividend of $1.92 per share and has a dividend yield of 8.7%. Invesco Mortgage Capital pays an annual dividend of $1.80 per share and has a dividend yield of 11.2%. The GEO Group pays out 77.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. The GEO Group has raised its dividend for 6 consecutive years and Invesco Mortgage Capital has raised its dividend for 2 consecutive years.

Profitability

This table compares The GEO Group and Invesco Mortgage Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The GEO Group 6.34% 14.82% 3.68%
Invesco Mortgage Capital 1.81% 12.09% 1.22%

Institutional and Insider Ownership

85.9% of The GEO Group shares are held by institutional investors. Comparatively, 58.8% of Invesco Mortgage Capital shares are held by institutional investors. 2.7% of The GEO Group shares are held by company insiders. Comparatively, 0.3% of Invesco Mortgage Capital shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares The GEO Group and Invesco Mortgage Capital’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
The GEO Group $2.33 billion 1.15 $145.09 million $2.47 8.95
Invesco Mortgage Capital $321.40 million 6.41 -$70.79 million N/A N/A

The GEO Group has higher revenue and earnings than Invesco Mortgage Capital.

Summary

The GEO Group beats Invesco Mortgage Capital on 10 of the 14 factors compared between the two stocks.

About The GEO Group

The GEO Group, Inc. (NYSE: GEO) is the first fully integrated equity real estate investment trust specializing in the design, financing, development, and operation of correctional, detention, and community reentry facilities around the globe. GEO is the world's leading provider of diversified correctional, detention, community reentry, and electronic monitoring services to government agencies worldwide with operations in the United States, Australia, South Africa, and the United Kingdom. GEO's worldwide operations include the ownership and/or management of 135 facilities totaling approximately 96,000 beds, including projects under development, with a growing workforce of approximately 23,000 professionals.

About Invesco Mortgage Capital

Invesco Mortgage Capital Inc. operates as a real estate investment trust (REIT) that focuses on investing in, financing, and managing residential and commercial mortgage-backed securities, and other mortgage-related assets. It invests in residential mortgage-backed securities (RMBS) and commercial mortgage-backed securities (CMBS) that are guaranteed by a U.S. government agency or federally chartered corporation; RMBS and CMBS that are not issued or guaranteed by a U.S. government agency or federally chartered corporation; credit risk transfer securities that are unsecured obligations issued by government-sponsored enterprises; residential and commercial mortgage loans; and other real estate-related financing arrangements. Invesco Mortgage Capital Inc. has elected to be taxed as a REIT and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was formally known as Invesco Agency Securities Inc. and changed its name to Invesco Mortgage Capital Inc. in June 2008. Invesco Mortgage Capital Inc. was incorporated in 2008 and is headquartered in Atlanta, Georgia.

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