Head-To-Head Review: TPG RE Finance Trust (NYSE:TRTX) versus The GEO Group (NYSE:GEO)

TPG RE Finance Trust (NYSE:TRTX) and The GEO Group (NYSE:GEO) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, analyst recommendations and dividends.

Volatility and Risk

TPG RE Finance Trust has a beta of 1.87, meaning that its share price is 87% more volatile than the S&P 500. Comparatively, The GEO Group has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500.

Earnings & Valuation

This table compares TPG RE Finance Trust and The GEO Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TPG RE Finance Trust $284.21 million 3.59 -$136.83 million $0.44 30.14
The GEO Group $2.35 billion 0.50 $113.03 million $1.03 9.28

The GEO Group has higher revenue and earnings than TPG RE Finance Trust. The GEO Group is trading at a lower price-to-earnings ratio than TPG RE Finance Trust, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares TPG RE Finance Trust and The GEO Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TPG RE Finance Trust 44.66% 11.28% 2.97%
The GEO Group 6.11% 16.58% 3.54%

Analyst Recommendations

This is a summary of current ratings for TPG RE Finance Trust and The GEO Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TPG RE Finance Trust 0 1 2 1 3.00
The GEO Group 0 1 0 0 2.00

TPG RE Finance Trust currently has a consensus target price of $14.13, suggesting a potential upside of 6.52%. The GEO Group has a consensus target price of $7.00, suggesting a potential downside of 26.78%. Given TPG RE Finance Trust’s stronger consensus rating and higher probable upside, research analysts clearly believe TPG RE Finance Trust is more favorable than The GEO Group.

Insider and Institutional Ownership

52.6% of TPG RE Finance Trust shares are owned by institutional investors. Comparatively, 79.6% of The GEO Group shares are owned by institutional investors. 1.8% of TPG RE Finance Trust shares are owned by company insiders. Comparatively, 3.5% 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.

Summary

TPG RE Finance Trust beats The GEO Group on 8 of the 15 factors compared between the two stocks.

About TPG RE Finance Trust

TPG RE Finance Trust, Inc. is a holding company, which engages in the provision of commercial real estate finance services. It originates, acquires, and manages commercial mortgage loans and other commercial real estate-related debt instruments in North America. The company was founded on October 24, 2014 and is headquartered in New York, NY.

About The GEO Group

The GEO Group, Inc. is a real estate investment trust, which specializes in the ownership, lease, and management of correctional, detention, and re-entry facilities. It operates through the following segments: U.S. Secure Services; GEO Care; International Services; and Facility Construction and Design. The U.S. Secure Services segment encompasses United States based public-private partnership corrections and detention business. The GEO Care segment consists of community-based services business, youth services business, and electronic monitoring and supervision service. The International Services segment includes detention operations in South Africa, Australia, and the United Kingdom. The Facility Construction and Design segment contracts with states, local, federal agencies, and international agencies for the design and construction of buildings. The company was founded by George C. Zoley in 1984 and is headquartered in Boca Raton, FL.

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