Maximus (NYSE:MMS) and Geo Group (NYSE:GEO) Financial Analysis

Geo Group (NYSE:GEO) and Maximus (NYSE:MMS) are both mid-cap business services companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, dividends, earnings, institutional ownership and profitability.

Valuation & Earnings

This table compares Geo Group and Maximus”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Geo Group	$2.42 billion	1.52	$31.97 million	$0.19	136.95
Maximus	$5.31 billion	0.77	$306.91 million	$5.03	14.33

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

Institutional & Insider Ownership

76.1% of Geo Group shares are held by institutional investors. Comparatively, 97.2% of Maximus shares are held by institutional investors. 5.3% of Geo Group shares are held by insiders. Comparatively, 1.6% of Maximus shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Geo Group	1.19%	7.36%	2.67%
Maximus	5.56%	23.37%	9.95%

Analyst Ratings

This is a breakdown of recent recommendations for Geo Group and Maximus, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Geo Group	0	0	4	0	3.00
Maximus	0	0	1	0	3.00

Geo Group presently has a consensus target price of $38.00, indicating a potential upside of 46.04%. Maximus has a consensus target price of $90.00, indicating a potential upside of 24.90%. Given Geo Group’s higher possible upside, equities analysts plainly believe Geo Group is more favorable than Maximus.

Dividends

Geo Group pays an annual dividend of $1.00 per share and has a dividend yield of 3.8%. Maximus pays an annual dividend of $1.20 per share and has a dividend yield of 1.7%. Geo Group pays out 526.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Maximus pays out 23.9% of its earnings in the form of a dividend. Maximus has increased its dividend for 2 consecutive years.

Risk & Volatility

Geo Group has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500. Comparatively, Maximus has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500.

Summary

Maximus beats Geo Group on 9 of the 16 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 Maximus

Maximus, Inc. operates as a provider of government services in the United States and internationally. It operates through three segments: U.S. Federal Services, U.S. Services, and Outside the U.S. The U.S. Services segment offers program eligibility support and enrollment; centralized multilingual customer contact centers, multichannel, and digital self-service options for enrollment; application assistance and independent health plan choice counseling; beneficiary outreach, education, eligibility, enrollment, and redeterminations; and person-centered independent disability, long-term sick, and other health assessments. This segment also provides employment services, such as eligibility support, case management, job-readiness preparation, job search and employer outreach, job retention and career advancement, and educational and training services; technology solutions; system implementation project management services; and specialized consulting services. The U.S. Federal Services segment offers Business process services, eligibility and enrollment, outreach, and other services for federal health and human services programs; clinical services; and technology solutions, including application development and modernization services, enterprise business solutions, advanced analytics and emerging technologies, cybersecurity services, and infrastructure and engineering solutions. The Outside the U.S. segment offers BPS solutions for international governments, including health and disability assessments, program administration for employment services, wellbeing solutions, and other job seeker-related services. Maximus, Inc. was founded in 1975 and is headquartered in McLean, Virginia.