Critical Survey: Geo Group (NYSE:GEO) versus Waste Connections (NYSE:WCN)

Waste Connections (NYSE:WCN) and Geo Group (NYSE:GEO) are both industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, risk, valuation, dividends, profitability, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares Waste Connections and Geo Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waste Connections	$9.47 billion	4.09	$1.08 billion	$4.15	37.19
Geo Group	$2.63 billion	1.59	$254.37 million	$2.12	14.96

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

Volatility & Risk

Waste Connections has a beta of 0.49, meaning that its stock price is 51% less volatile than the S&P 500. Comparatively, Geo Group has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Waste Connections and Geo Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waste Connections	0	3	14	1	2.89
Geo Group	0	1	4	1	3.00

Waste Connections presently has a consensus price target of $199.22, indicating a potential upside of 29.08%. Geo Group has a consensus price target of $40.00, indicating a potential upside of 26.10%. Given Waste Connections’ higher possible upside, research analysts plainly believe Waste Connections is more favorable than Geo Group.

Institutional & Insider Ownership

86.1% of Waste Connections shares are owned by institutional investors. Comparatively, 76.1% of Geo Group shares are owned by institutional investors. 0.3% of Waste Connections shares are owned by insiders. Comparatively, 5.0% of Geo Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Waste Connections	10.86%	17.31%	6.62%
Geo Group	10.31%	10.42%	4.14%

Summary

Waste Connections beats Geo Group on 11 of the 14 factors compared between the two stocks.

About Waste Connections

Waste Connections, Inc. provides non-hazardous waste collection, transfer, disposal, and resource recovery services in the United States and Canada. It offers collection services to residential, commercial, municipal, industrial, and exploration and production (E&P) customers; landfill disposal services; and recycling services for various recyclable materials, including compost, cardboard, mixed paper, plastic containers, glass bottles, and ferrous and aluminum metals. The company owns and operates transfer stations that receive compact and/or load waste to be transported to landfills or treatment facilities through truck, rail, or barge; and intermodal services for the rail haul movement of cargo and solid waste containers in the Pacific Northwest through a network of intermodal facilities. In addition, it provides E&P waste treatment, recovery, and disposal services for waste resulting from oil and natural gas exploration and production activity, such as drilling fluids, drill cuttings, completion fluids, and flowback water; production wastes and produced water during a well's operating life; contaminated soils that require treatment during site reclamation; and substances, which require clean-up after a spill, reserve pit clean-up, or pipeline rupture. Further, the company offers leasing services to its customers. Waste Connections, Inc. was founded in 1997 and is based in Woodbridge, Canada.

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.