Dividend Coverage: This Private Prison Operator has a Dividend Yield of 6.49%; Will Trade Ex-Dividend on July 19, 2017
ACCESSWIRE
LONDON, UK / ACCESSWIRE / July 18, 2017 / Pro-Trader Daily takes a closer look at The GEO Group, Inc. (NYSE: GEO) as the Company's stock will begin trading ex-dividend on July 19, 2017. In order to capture the dividend payout, investors must purchase the stock one day prior to the ex-dividend date that is by latest at the end of trading session on July 18, 2017. Are you looking for research on dividend stocks, if so register with us now for your free membership at:
On July 10, 2017, GEO Group announced that its Board of Directors declared a quarterly cash dividend of $0.47 per share. The quarterly cash dividend will be paid on July 28, 2017, to shareholders of record as of the close of business on July 21, 2017.
George C. Zoley, Chairman and Chief Executive Officer of GEO Group, said:
"We are pleased to declare a quarterly cash dividend of $0.47 per share, or $1.88 per share annualized, which is indicative of our continued commitment to return value to our shareholders."
GEO Group's indicated dividend represents a yield of 6.49%, more than three times compared to the average dividend yield for the Services sector of 2.01%. The Company has increased dividend for four consecutive years.
Dividend Insights
GEO Group has a dividend payout ratio of 95.4%, which indicates that the Company distributes approximately $0.95 for every $1.00 earned. The dividend payout ratio reflects how much money a Company is returning to shareholders versus how much money it is keeping on hand to reinvest in growth, to pay off debt, and/or to add to its cash reserves.
According to analysts' estimates, GEO Group is projected to report earnings of $1.55 in the coming year, while the Company's annualized dividend is $1.88. One of the primary reasons for the difference between earnings and the annualized dividend is that REITs are structured by law to distribute at least 90% of earnings. Moreover, since REITs generate income from owning portfolios of investment real estate, they are likely to have higher depreciation charges.
Since depreciation is a non-cash charge, it does not directly impact the ability of dividend the Companies can distribute. For this reason, Fund from Operations (FFO) is calculated by adding depreciation and amortization to earnings, subtracting any gains on sales, to get an accurate picture of cash flow, and a REIT's ability to pay dividends. For instance, for the quarter ended March 31, 2017, net income attributable to GEO Group was $40.4 million, or $0.35 per diluted share, while its adjusted FFO was $74.0 million, or $0.65 per diluted share, and it expects to generate adjusted FFO in a range of $2.47 to $2.53 per diluted share, which should be able to sufficiently cover the dividend outflow.
About the Company
GEO Group 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 Group 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 Group's worldwide operations include the ownership and/or management of 143 facilities totaling approximately 100,000 beds, including projects under development, with a growing workforce of approximately 23,500 professionals.
Recent Development for GEO Group
On May 26, 2017, GEO Group announced that it has been awarded two ten-year contracts, inclusive of renewal option periods, by the Federal Bureau of Prisons ("BOP") for the continued housing of criminal aliens under the custody of the BOP at the Company-owned 1,800-bed Big Spring Facility and the Company-owned 1,732-bed Flight Line Facility, which on a combined basis were previously referred to as the Big Spring Correctional Center in Texas.
The two ten-year contracts were awarded to GEO under a long-standing procurement commonly referred to as Criminal Alien Requirement (CAR) 16, which was issued by the BOP in 2015. The contracts are expected to generate total combined revenues of approximately $664 million over their full ten-year terms, and their expected financial contribution in 2017 is in-line with the assumptions which were included in GEO's most recently issued financial guidance.
Stock Performance
GEO Group's share price finished yesterday's trading session at $30.80, slightly advancing 0.56%. A total volume of 521.15 thousand shares have exchanged hands. The Company's stock price soared 0.23% in the last one month, 18.83% in the past six months and 33.03% in the previous twelve months. Additionally, the stock surged 28.58% since the start of the year. Shares of the Company have a PE ratio of 24.10 and have a dividend yield of 6.10%. The stock currently has a market cap of $3.74 billion.
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