Corrections Corp. of America (NYSE: CXW) and Gladstone Land Corporation (NASDAQ:LAND) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Dividends

Corrections Corp. of America pays an annual dividend of $1.68 per share and has a dividend yield of 6.6%. Gladstone Land Corporation pays an annual dividend of $0.53 per share and has a dividend yield of 4.0%. Corrections Corp. of America pays out 93.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Gladstone Land Corporation pays out 1,060.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Corrections Corp. of America has raised its dividend for 4 consecutive years. Corrections Corp. of America is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Corrections Corp. of America has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500. Comparatively, Gladstone Land Corporation has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.

Valuation and Earnings

This table compares Corrections Corp. of America and Gladstone Land Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Corrections Corp. of America $1.82 billion 1.66 $452.80 million $1.79 14.26
Gladstone Land Corporation $21.14 million 7.58 $15.48 million $0.05 266.85

Corrections Corp. of America has higher revenue and earnings than Gladstone Land Corporation. Corrections Corp. of America is trading at a lower price-to-earnings ratio than Gladstone Land Corporation, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Corrections Corp. of America and Gladstone Land Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Corrections Corp. of America 0 1 3 0 2.75
Gladstone Land Corporation 0 0 2 0 3.00

Corrections Corp. of America currently has a consensus target price of $30.33, suggesting a potential upside of 18.81%. Gladstone Land Corporation has a consensus target price of $14.13, suggesting a potential upside of 5.88%. Given Corrections Corp. of America’s higher probable upside, analysts plainly believe Corrections Corp. of America is more favorable than Gladstone Land Corporation.

Profitability

This table compares Corrections Corp. of America and Gladstone Land Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Corrections Corp. of America 11.62% 14.54% 6.51%
Gladstone Land Corporation 2.58% 0.57% 0.15%

Institutional & Insider Ownership

86.2% of Corrections Corp. of America shares are owned by institutional investors. Comparatively, 21.1% of Gladstone Land Corporation shares are owned by institutional investors. 1.3% of Corrections Corp. of America shares are owned by insiders. Comparatively, 21.9% of Gladstone Land Corporation shares are owned 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.

Summary

Corrections Corp. of America beats Gladstone Land Corporation on 12 of the 17 factors compared between the two stocks.

Corrections Corp. of America Company Profile

CoreCivic, Inc., formerly Corrections Corporation of America, is a diversified government solutions company. The Company provides partnership correctional, detention and residential reentry facilities and operates prison in the United States. The Company’s business offerings include CoreCivic Safety, CoreCivic Properties, and CoreCivic Community. The Company provides a range of solutions to government partners that serve the public good corrections and detention management, government real estate solutions, and network of residential reentry centers. As of March 31, 2017, the Company owned or controlled 48 correctional and detention facilities, owned or controlled 27 residential reentry centers, and managed an additional 11 correctional and detention facilities owned by its government partners, with a total design capacity of approximately 88,400 beds in 20 states.

Gladstone Land Corporation Company Profile

Gladstone Land Corporation is an agricultural real estate investment trust (REIT). The Company is engaged in the business of owning and leasing farmland. The Company also owns various farm-related facilities, such as cooling facilities, buildings utilized for the storage and assembly of boxes for shipping produce (box barns), packinghouses, processing facilities and various storage facilities. The Company is engaged in leasing its farms and farm-related facilities to independent or corporate farming operations. As of September 12, 2017, the Company owned 72 farms, including 58,777 total acres across seven states in the United States (Arizona, California, Colorado, Florida, Michigan, Nebraska and Oregon). As of December 31, 2016, the Company’s farms and facilities were leased to 40 different, unrelated tenants that are either independent or corporate farming operations. The Company focuses to own primarily single-tenant, agricultural real property.

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