CoreCivic, formerly Corrections Corporation of America (CXW), will lower its quarterly dividend from $0.54 to $0.42 per share.
The dividend will be paid on January 13, 2017, to shareholders of record as of the close of business on January 3, 2017.
Damon Hininger, CoreCivic's President and Chief Executive Officer, stated, "We believe our updated dividend level appropriately reflects the current cash flows of the business following the renegotiation in October of the South Texas Family Residential Center contract with Immigration and Customs Enforcement. We also believe maintaining our targeted payout ratio of approximately 80 percent of AFFO per share, or approximately 75 percent of Normalized FFO per share, demonstrates our confidence in the business and provides sufficient flexibility for the Company to effectively compete for the numerous growth opportunities requiring the deployment of capital that we see in the market."
The new annualized dividend rate of $1.68 translates into a yield of approximately 6.7% based on the $25.02 closing price on December 8, 2016.
On October 28, 2016, Corrections Corporation of America announced the rebranding of its corporate enterprise as CoreCivic. Under the CoreCivic brand, the Company will provide three distinct business offerings: CoreCivic Safety, a national leader in high quality corrections and detention management; CoreCivic Properties, a wide range of innovative, cost-saving government real estate solutions; and CoreCivic Community, a growing network of residential reentry centers to help tackle America’s recidivism crisis.
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