CoreCivic, Inc.CXW recently announced a new agreement with the Vermont Department of Corrections, per which it will provide accommodation to around 350 state prisoners at its Tallahatchie County Correctional Facility in Tutwiler, MS. The contract will be put into effect from Oct 1.
Per management, this agreement has been signed for an initial tenure of two years "with one additional two-year extension option thereafter upon mutual agreement". Management estimates the deal to result in around $6.5 million of annual revenues, based on its expectation of contract utilization. The facility can house up to 2,672 inmates.
Notably, the company has a long association record with the Vermont Department of Corrections. Moreover, in June 2018, CoreCivic signed an agreement with U.S. Marshals Service for providing housing to 1,350 offenders at the same facility. The number of inmates can be increased, subject to availability. Further, the contract is extendable for two-year periods, for an infinite number of times.
CoreCivic is the largest provider of real estate facilities to the government in the United States. Additionally, the company provides a variety of solutions to government problems in the form of correction and detention management service and residential reentry facilities. Demand for the company's services has seen an escalation in recent times. In fact, in the last year, the company has commenced five new state contracts. This is expected to increase occupancy level for the company's properties, which will further boost profitability.
The company's shares have gained 20.9% over the past six months, outperforming 7.1% growth recorded by the industry . Further, the Zacks Consensus Estimate for current-year funds from operations (FFO) per share moved 2.2% north in 60 days' time. As a result, the stock currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Other Stocks to Consider
Some other top-ranked stocks in the real estate industry include Park Hotels & Resorts Inc. PK , Life Storage, Inc. LSI and Clipper Realty Inc. CLPR . All three stocks carry a Zacks Rank of 2 (Buy).
Park Hotels & Resorts' Zacks Consensus Estimate for current-year FFO per share inched up 1.7% in 60 days' time. The stock has climbed 23.1% over the past six months.
Life Storage's Zacks Consensus Estimate for 2018 FFO per share moved up 1.5% over the last 60 days. Also, its shares have gained 15.6% in the past six months.
Clipper Realty's Zacks Consensus Estimate for 2018 FFO per share moved 7% north over the last 60 days. The company's shares have appreciated nearly 42.3% in six months' time.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportLife Storage, Inc. (LSI): Free Stock Analysis ReportPark Hotels & Resorts Inc. (PK): Free Stock Analysis ReportCorrections Corp. of America (CXW): Free Stock Analysis ReportClipper Realty Inc. (CLPR): Free Stock Analysis ReportTo read this article on Zacks.com click here.