Analyzing Medical Properties Trust (MPW) and HCP (HCP)
Medical Properties Trust (NYSE: MPW) and HCP (NYSE:HCP) are both mid-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, earnings, profitability, valuation and institutional ownership.
Medical Properties Trust pays an annual dividend of $0.96 per share and has a dividend yield of 7.4%. HCP pays an annual dividend of $1.48 per share and has a dividend yield of 5.1%. Medical Properties Trust pays out 115.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. HCP pays out 102.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Medical Properties Trust has increased its dividend for 3 consecutive years. Medical Properties Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility & Risk
Medical Properties Trust has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, HCP has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500.
This is a breakdown of current recommendations and price targets for Medical Properties Trust and HCP, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Medical Properties Trust||2||5||6||0||2.31|
Medical Properties Trust currently has a consensus price target of $14.00, suggesting a potential upside of 7.61%. HCP has a consensus price target of $32.33, suggesting a potential upside of 11.34%. Given HCP’s higher possible upside, analysts clearly believe HCP is more favorable than Medical Properties Trust.
This table compares Medical Properties Trust and HCP’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Medical Properties Trust||42.25%||7.54%||3.83%|
Institutional and Insider Ownership
83.7% of Medical Properties Trust shares are owned by institutional investors. Comparatively, 89.6% of HCP shares are owned by institutional investors. 1.0% of Medical Properties Trust shares are owned by insiders. Comparatively, 0.2% of HCP shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Valuation & Earnings
This table compares Medical Properties Trust and HCP’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Medical Properties Trust||$610.24 million||7.46||$501.71 million||$0.83||15.67|
|HCP||$2.02 billion||6.74||$1.17 billion||$1.45||20.03|
HCP has higher revenue and earnings than Medical Properties Trust. Medical Properties Trust is trading at a lower price-to-earnings ratio than HCP, indicating that it is currently the more affordable of the two stocks.
HCP beats Medical Properties Trust on 9 of the 17 factors compared between the two stocks.
Medical Properties Trust Company Profile
Medical Properties Trust, Inc. is a real estate investment trust (REIT). The Company focuses on investing in and owning net-leased healthcare facilities across the United States and selectively in foreign jurisdictions. The Company’s segment is its investments in healthcare real estate, including mortgage and other loans, as well as any equity investments in its tenants. The Company conducts its operations through MPT Operating Partnership, L.P. The Company acquires and develops healthcare facilities, and leases the facilities to healthcare operating companies under long-term net leases. The Company makes mortgage loans to healthcare operators collateralized by their real estate assets. As of February 24, 2017, the Company’s portfolio consisted of 232 properties, including 215 facilities (of the 220 facilities that it owns) were leased to 30 tenants, five were under development, and the remaining assets were in the form of mortgage loans to four operators.
HCP Company Profile
HCP, Inc. is a self-administered real estate investment trust. The Company invests in real estate serving the healthcare industry in the United States. The Company’s segments include senior housing triple-net (SH NNN), senior housing operating portfolio (SHOP), life science and medical office. Its senior housing facilities include independent living facilities, assisted living facilities, memory care facilities, care homes, and continuing care retirement communities. Its Life science properties contain laboratory and office space for biotechnology, medical device and pharmaceutical companies, scientific research institutions, government agencies and other organizations. Its Medical office buildings contain physicians’ offices and examination rooms, and may include pharmacies, hospital ancillary service space and outpatient services. As of December 31, 2016, it had interests in and managed 15 hospitals, 61 care homes in the United Kingdom and five post-acute/skilled nursing facilities.
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