Geo Group (GEO) is the nation’s largest operator of prisons and correctional facilities — and a good place for investors to look if they want to lock up an income stream.
Geo converted to a real estate investment trust (REIT) at the beginning of the year, meaning it has to pay out most of its earnings as dividends. Indeed, it bumped the quarterly dividend by 10% to 55 cents earlier this month. That helped boost the current yield up to 6.8%.
Geo’s stock is up just 20% for the year-to-date to lag the broader market, but factor in the dividend and the total return comes to very competitive 28% — essentially in line with the S&P 500′s total return so far this year.
At 19 times forward earnings, Geo shares aren’t exactly on sale. But given the 15% long-term growth forecast, neither are they overpriced.
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