Omega Healthcare Investors (NYSE:OHI) vs. Global Medical REIT (NYSE:XRN) Critical Review

Global Medical REIT (NYSE:XRN) and Omega Healthcare Investors (NYSE:OHI) are both real estate companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, valuation, profitability, risk, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

57.5% of Global Medical REIT shares are held by institutional investors. Comparatively, 65.2% of Omega Healthcare Investors shares are held by institutional investors. 8.9% of Global Medical REIT shares are held by insiders. Comparatively, 1.7% of Omega Healthcare Investors shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Global Medical REIT and Omega Healthcare Investors”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Global Medical REIT	$148.21 million	2.83	-$5.84 million	$3.72	8.51
Omega Healthcare Investors	$1.19 billion	12.52	$572.03 million	$2.80	17.56

Omega Healthcare Investors has higher revenue and earnings than Global Medical REIT. Global Medical REIT is trading at a lower price-to-earnings ratio than Omega Healthcare Investors, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Global Medical REIT has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500. Comparatively, Omega Healthcare Investors has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500.

Dividends

Global Medical REIT pays an annual dividend of $1.92 per share and has a dividend yield of 6.1%. Omega Healthcare Investors pays an annual dividend of $2.72 per share and has a dividend yield of 5.5%. Global Medical REIT pays out 51.6% of its earnings in the form of a dividend. Omega Healthcare Investors pays out 97.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Global Medical REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Global Medical REIT and Omega Healthcare Investors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Global Medical REIT	0	7	2	0	2.22
Omega Healthcare Investors	2	7	7	0	2.31

Global Medical REIT currently has a consensus price target of $40.17, suggesting a potential upside of 26.91%. Omega Healthcare Investors has a consensus price target of $49.93, suggesting a potential upside of 1.53%. Given Global Medical REIT’s higher probable upside, equities research analysts clearly believe Global Medical REIT is more favorable than Omega Healthcare Investors.

Profitability

This table compares Global Medical REIT and Omega Healthcare Investors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Global Medical REIT	36.82%	13.31%	4.41%
Omega Healthcare Investors	66.96%	15.76%	8.40%

Summary

Omega Healthcare Investors beats Global Medical REIT on 10 of the 16 factors compared between the two stocks.

About Global Medical REIT

Global Medical REIT Inc. (GMRE) is a net-lease medical office real estate investment trust (REIT) that owns and acquires healthcare facilities and leases those facilities to physician groups and regional and national healthcare systems.

About Omega Healthcare Investors

Omega Healthcare Investors, Inc. engages in the provision of financing and capital to the long-term healthcare industry with a particular focus on skilled nursing facilities, assisted living facilities, independent living facilities, rehabilitation and acute care facilities, and medical office buildings. The company was founded on March 31, 1992 and is headquartered in Hunt Valley, MD.