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On Geo Group

Let’s continue analyzing what landed GEO Group on our radar. 

In 2021, GEO changed its corporate structure from a Real Estate Investment Trust (REIT). 

This move gave them more control over their free cash flow, previously restricted by the REIT requirement to distribute at least 90% of taxable income to shareholders.

Now, they have the freedom to allocate their cash more flexibly.

Executive Chairman George Zoley noted that this change supports a broader strategy to tackle future debt, focusing on reducing net recourse debt. This approach aims to serve shareholder interests better, offering GEO the flexibility to invest in growth opportunities and potentially enhance shareholder returns.

GEO’s price-to-free-cash-flow ratio is an impressive 6.3, showing the company generates considerable cash compared to its share price. 

GEO has used that cash to knock down its debt from $3 billion to $1.8 billion since 2021.

Additionally, The GEO Group operates in a niche market with high barri…