Critical Contrast: Geo Group (NYSE:GEO) and Brink’s (NYSE:BCO)

Geo Group (NYSE:GEO) and Brink’s (NYSE:BCO) are both mid-cap industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, institutional ownership, earnings and profitability.

Volatility and Risk

Geo Group has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, Brink’s has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500.

Institutional and Insider Ownership

76.1% of Geo Group shares are owned by institutional investors. Comparatively, 95.0% of Brink’s shares are owned by institutional investors. 5.0% of Geo Group shares are owned by company insiders. Comparatively, 1.0% of Brink’s shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Geo Group and Brink’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Geo Group	10.31%	10.42%	4.14%
Brink’s	3.30%	87.18%	4.95%

Analyst Ratings

This is a summary of current ratings and price targets for Geo Group and Brink’s, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Geo Group	0	1	4	1	3.00
Brink’s	0	2	2	0	2.50

Geo Group currently has a consensus price target of $40.00, indicating a potential upside of 25.79%. Brink’s has a consensus price target of $154.00, indicating a potential upside of 41.51%. Given Brink’s’ higher probable upside, analysts clearly believe Brink’s is more favorable than Geo Group.

Earnings & Valuation

This table compares Geo Group and Brink’s”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Geo Group	$2.63 billion	1.59	$254.37 million	$2.12	15.00
Brink’s	$5.26 billion	0.85	$199.70 million	$4.32	25.19

Geo Group has higher earnings, but lower revenue than Brink’s. Geo Group is trading at a lower price-to-earnings ratio than Brink’s, indicating that it is currently the more affordable of the two stocks.

Summary

Brink’s beats Geo Group on 8 of the 15 factors compared between the two stocks.

About Geo Group

The GEO Group, Inc. (NYSE: GEO) engages in ownership, leasing, and management of secure facilities, processing centers, and community-based reentry facilities in the United States, Australia, the United Kingdom, and South Africa. The company also provides secure facility management services, including the provision of security, administrative, rehabilitation, education, and food services; reentry services, such as temporary housing, programming, employment assistance, and other services; electronic monitoring and supervision services; and transportation services; as well as designs, constructs, and finances new facilities through projects. The company was founded in 1984 and is based in Boca Raton, Florida.

About Brink’s

The Brink’s Co. engages in providing cash management services, digital retail solutions, and ATM managed services. It operates through the following geographical segments: North America, Latin America, Europe, and Rest of World. The North America segment operates in the U.S. and Canada. The Latin America segment refers to the operations in Latin American countries. The Europe segment relates to operations in European countries. The Rest of World segment focuses on the operations in the Middle East, Africa, and Asia. The company was founded by Perry Brink and Fidelia Brink on May 5, 1859 and is headquartered in Richmond, VA.