Diversified Healthcare Trust (NASDAQ:DHC) versus Welltower (NYSE:WELL) Head-To-Head Comparison

Diversified Healthcare Trust (NASDAQ:DHC) and Welltower (NYSE:WELL) are both real estate companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.

Risk & Volatility

Diversified Healthcare Trust has a beta of 2.29, suggesting that its share price is 129% more volatile than the S&P 500. Comparatively, Welltower has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500.

Institutional and Insider Ownership

76.0% of Diversified Healthcare Trust shares are owned by institutional investors. Comparatively, 94.8% of Welltower shares are owned by institutional investors. 10.2% of Diversified Healthcare Trust shares are owned by company insiders. Comparatively, 0.4% of Welltower shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Diversified Healthcare Trust pays an annual dividend of $0.04 per share and has a dividend yield of 0.5%. Welltower pays an annual dividend of $3.40 per share and has a dividend yield of 1.4%. Diversified Healthcare Trust pays out -3.6% of its earnings in the form of a dividend. Welltower pays out 156.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Welltower has increased its dividend for 2 consecutive years. Welltower is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Diversified Healthcare Trust and Welltower’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Diversified Healthcare Trust	-17.73%	-16.22%	-6.06%
Welltower	12.15%	3.56%	2.35%

Valuation and Earnings

This table compares Diversified Healthcare Trust and Welltower”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diversified Healthcare Trust	$1.50 billion	1.23	-$285.89 million	($1.11)	-6.85
Welltower	$12.59 billion	13.58	$936.84 million	$2.18	108.85

Welltower has higher revenue and earnings than Diversified Healthcare Trust. Diversified Healthcare Trust is trading at a lower price-to-earnings ratio than Welltower, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Diversified Healthcare Trust and Welltower, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diversified Healthcare Trust	1	2	2	1	2.50
Welltower	0	3	14	0	2.82

Diversified Healthcare Trust presently has a consensus target price of $9.83, indicating a potential upside of 29.39%. Welltower has a consensus target price of $251.06, indicating a potential upside of 5.80%. Given Diversified Healthcare Trust’s higher possible upside, equities research analysts plainly believe Diversified Healthcare Trust is more favorable than Welltower.

Summary

Welltower beats Diversified Healthcare Trust on 13 of the 18 factors compared between the two stocks.

About Diversified Healthcare Trust

Diversified Healthcare Trust is a real estate investment trust, which engages in the ownership of senior living communities, medical office buildings, and wellness centers. It operates through the following segments: Office Portfolio, Senior Housing Operating Portfolio (SHOP), and Non-Segment. The Office Portfolio segment consists of medical office properties leased to medical providers and other medical related businesses, as well as life science properties leased to biotech laboratories and other similar tenants. The SHOP segment manages senior living communities that offers short term and long term residential care, and other services for residents where it pay fees to the operator to manage the communities for its account. The company was founded on December 16, 1998 and is headquartered in Newton, MA.

About Welltower

Welltower Inc. (NYSE:WELL), a real estate investment trust (“REIT”) and S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. Welltower invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience. Welltower owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties.