Critical Analysis: Omega Healthcare Investors (OHI) and Caretrust REIT (CTRE)
Omega Healthcare Investors (NYSE:OHI) and Caretrust REIT (NASDAQ:CTRE) are both mid-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.
Valuation and Earnings
This table compares Omega Healthcare Investors and Caretrust REIT’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Omega Healthcare Investors||$881.68 million||8.28||$281.58 million||$3.04||11.75|
|Caretrust REIT||$156.94 million||13.26||$57.92 million||$1.28||18.27|
Volatility & Risk
Omega Healthcare Investors has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500. Comparatively, Caretrust REIT has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500.
This table compares Omega Healthcare Investors and Caretrust REIT’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Omega Healthcare Investors||31.94%||7.37%||3.26%|
Omega Healthcare Investors pays an annual dividend of $2.64 per share and has a dividend yield of 7.4%. Caretrust REIT pays an annual dividend of $0.90 per share and has a dividend yield of 3.8%. Omega Healthcare Investors pays out 86.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Caretrust REIT pays out 70.3% of its earnings in the form of a dividend. Omega Healthcare Investors has raised its dividend for 9 consecutive years and Caretrust REIT has raised its dividend for 3 consecutive years. Omega Healthcare Investors is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of current ratings and price targets for Omega Healthcare Investors and Caretrust REIT, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Omega Healthcare Investors||0||5||3||0||2.38|
Omega Healthcare Investors presently has a consensus price target of $36.05, indicating a potential upside of 0.90%. Caretrust REIT has a consensus price target of $21.00, indicating a potential downside of 10.22%. Given Omega Healthcare Investors’ higher possible upside, equities analysts plainly believe Omega Healthcare Investors is more favorable than Caretrust REIT.
Insider and Institutional Ownership
67.9% of Omega Healthcare Investors shares are held by institutional investors. Comparatively, 88.3% of Caretrust REIT shares are held by institutional investors. 1.7% of Omega Healthcare Investors shares are held by company insiders. Comparatively, 1.6% of Caretrust REIT shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Caretrust REIT beats Omega Healthcare Investors on 11 of the 18 factors compared between the two stocks.
Omega Healthcare Investors Company Profile
Omega is a real estate investment trust that invests in the long-term healthcare industry, primarily in skilled nursing and assisted living facilities. Its portfolio of assets is operated by a diverse group of healthcare companies, predominantly in a triple-net lease structure. The assets span all regions within the US, as well as in the UK.
Caretrust REIT Company Profile
CareTrust REIT, Inc. is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition and leasing of seniors housing and healthcare-related properties. With 199 net-leased healthcare properties and three operated seniors housing properties in 27 states, CareTrust is pursuing opportunities across the nation to acquire properties that will be leased to a diverse group of local, regional and national seniors housing operators, healthcare services providers, and other healthcare-related businesses.
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