Healthcare Realty Trust (NYSE: HR) and Physicians Realty Trust (NYSE:DOC) are both mid-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, dividends, risk, earnings and valuation.

Volatility and Risk

Healthcare Realty Trust has a beta of 0.32, meaning that its stock price is 68% less volatile than the S&P 500. Comparatively, Physicians Realty Trust has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Healthcare Realty Trust 26.70% 6.62% 3.70%
Physicians Realty Trust 11.39% 1.70% 1.07%

Dividends

Healthcare Realty Trust pays an annual dividend of $1.20 per share and has a dividend yield of 3.7%. Physicians Realty Trust pays an annual dividend of $0.92 per share and has a dividend yield of 5.2%. Healthcare Realty Trust pays out 123.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Physicians Realty Trust pays out 400.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of recent recommendations and price targets for Healthcare Realty Trust and Physicians Realty Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Healthcare Realty Trust 1 2 5 0 2.50
Physicians Realty Trust 0 3 10 0 2.77

Healthcare Realty Trust presently has a consensus price target of $33.29, suggesting a potential upside of 2.51%. Physicians Realty Trust has a consensus price target of $20.41, suggesting a potential upside of 14.79%. Given Physicians Realty Trust’s stronger consensus rating and higher possible upside, analysts plainly believe Physicians Realty Trust is more favorable than Healthcare Realty Trust.

Valuation and Earnings

This table compares Healthcare Realty Trust and Physicians Realty Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Healthcare Realty Trust $411.63 million 9.85 $85.57 million $0.97 33.47
Physicians Realty Trust $241.03 million 13.22 $29.98 million $0.23 77.30

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

Insider and Institutional Ownership

94.7% of Healthcare Realty Trust shares are held by institutional investors. Comparatively, 93.4% of Physicians Realty Trust shares are held by institutional investors. 1.9% of Healthcare Realty Trust shares are held by company insiders. Comparatively, 0.5% of Physicians Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Healthcare Realty Trust beats Physicians Realty Trust on 10 of the 16 factors compared between the two stocks.

Healthcare Realty Trust Company Profile

Healthcare Realty Trust Incorporated is a self-managed and self-administered real estate investment trust. The Company owns, leases, manages, acquires, finances, develops and redevelops real estate properties associated primarily with the delivery of outpatient healthcare services across the United States. The Company provided property management services for 146 healthcare-related properties across the nation, totaling approximately 10.3 million square feet, as of December 31, 2016. As of December 31, 2016, the Company’s 202 owned real estate properties were located in 27 states and totaled approximately 14.6 million square feet. The Company’s medical office/outpatient facilities are located in various states of the United States, such as Alabama, Arizona, California, Colorado, District of Columbia, Florida, Hawaii, Illinois, Indiana, Iowa, Minnesota, Missouri, North Carolina, Oklahoma, Tennessee, Texas, Virginia and Washington.

Physicians Realty Trust Company Profile

Physicians Realty Trust (the Trust) is a real estate investment trust. Physicians Realty L.P. is the operating partnership of the Trust. The Trust and its operating partnership are engaged in acquiring, developing, owning and managing healthcare properties that are leased to physicians, hospitals and healthcare delivery systems. As of December 31, 2016, the Company’s portfolio consisted of 246 properties located in 29 states with approximately 10,883,601 net leasable square feet. The Company invests in real estate that is integral to providing healthcare services. The Company focuses its investment activity on various types of healthcare properties, such as medical office buildings; outpatient treatment and diagnostic facilities; physician group practice clinics; ambulatory surgery centers, and specialty hospitals and treatment centers. Its properties include Arrowhead Commons, Aurora Medical Office Building, Decatur Medical Office Building and El Paso Medical Office Building.

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