ARBOR RLTY TR I/SH (NYSE:ABR) and The GEO Group (NYSE:GEO) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.
Valuation and Earnings
This table compares ARBOR RLTY TR I/SH and The GEO Group’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|ARBOR RLTY TR I/SH||$315.94 million||3.19||$128.63 million||$1.36||6.72|
|The GEO Group||$2.48 billion||0.56||$166.60 million||$2.75||4.16|
The GEO Group has higher revenue and earnings than ARBOR RLTY TR I/SH. The GEO Group is trading at a lower price-to-earnings ratio than ARBOR RLTY TR I/SH, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
ARBOR RLTY TR I/SH has a beta of 1.79, indicating that its stock price is 79% more volatile than the S&P 500. Comparatively, The GEO Group has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500.
This table compares ARBOR RLTY TR I/SH and The GEO Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|ARBOR RLTY TR I/SH||12.37%||3.58%||0.68%|
|The GEO Group||6.11%||17.43%||4.06%|
This is a summary of current ratings and target prices for ARBOR RLTY TR I/SH and The GEO Group, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|ARBOR RLTY TR I/SH||0||1||2||0||2.67|
|The GEO Group||0||0||1||0||3.00|
ARBOR RLTY TR I/SH currently has a consensus target price of $12.00, suggesting a potential upside of 31.29%. The GEO Group has a consensus target price of $15.00, suggesting a potential upside of 31.00%. Given ARBOR RLTY TR I/SH’s higher probable upside, equities research analysts plainly believe ARBOR RLTY TR I/SH is more favorable than The GEO Group.
Institutional & Insider Ownership
34.7% of ARBOR RLTY TR I/SH shares are owned by institutional investors. Comparatively, 75.7% of The GEO Group shares are owned by institutional investors. 7.4% of ARBOR RLTY TR I/SH shares are owned by company insiders. Comparatively, 2.7% of The GEO Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
ARBOR RLTY TR I/SH pays an annual dividend of $1.20 per share and has a dividend yield of 13.1%. The GEO Group pays an annual dividend of $1.92 per share and has a dividend yield of 16.8%. ARBOR RLTY TR I/SH pays out 88.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. The GEO Group pays out 69.8% of its earnings in the form of a dividend. ARBOR RLTY TR I/SH has increased its dividend for 8 consecutive years and The GEO Group has increased its dividend for 7 consecutive years. The GEO Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
The GEO Group beats ARBOR RLTY TR I/SH on 9 of the 17 factors compared between the two stocks.
ARBOR RLTY TR I/SH Company Profile
Arbor Realty Trust, Inc. invests in a diversified portfolio of structured finance assets in the multifamily and commercial real estate markets. The company operates in two segments, Structured Business and Agency Business. It primarily invests in real estate-related bridge and mezzanine loans, including junior participating interests in first mortgages, and preferred and direct equity, as well as real estate-related notes and various mortgage-related securities. The company offers bridge financing products to borrowers who seek short-term capital to be used in an acquisition of property; financing by making preferred equity investments in entities that directly or indirectly own real property; mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower's equity in a transaction; and junior participation financing in the form of a junior participating interest in the senior debt. In addition, it underwrites, originates, sells, and services multifamily mortgage loans. The company qualifies as a real estate investment trust for federal income tax purposes. It generally 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 founded in 2003 and is headquartered in Uniondale, New York.
The GEO Group Company Profile
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.
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