Diversified Healthcare Trust (NASDAQ:DHC) & Medical Properties Trust (NYSE:MPT) Financial Review

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

Volatility and Risk

Diversified Healthcare Trust has a beta of 2.3, suggesting that its share price is 130% more volatile than the S&P 500. Comparatively, Medical Properties Trust has a beta of 1.41, suggesting that its share price is 41% more volatile than the S&P 500.

Profitability

This table compares Diversified Healthcare Trust and Medical Properties Trust’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%
Medical Properties Trust	-2.96%	-0.66%	-0.20%

Dividends

Diversified Healthcare Trust pays an annual dividend of $0.04 per share and has a dividend yield of 0.5%. Medical Properties Trust pays an annual dividend of $0.36 per share and has a dividend yield of 8.7%. Diversified Healthcare Trust pays out -3.6% of its earnings in the form of a dividend. Medical Properties Trust pays out -600.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Medical Properties Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

76.0% of Diversified Healthcare Trust shares are owned by institutional investors. Comparatively, 71.8% of Medical Properties Trust shares are owned by institutional investors. 10.2% of Diversified Healthcare Trust shares are owned by insiders. Comparatively, 1.8% of Medical Properties Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Diversified Healthcare Trust and Medical Properties Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diversified Healthcare Trust	1	2	2	1	2.50
Medical Properties Trust	1	1	0	0	1.50

Diversified Healthcare Trust presently has a consensus target price of $9.83, suggesting a potential upside of 22.92%. Medical Properties Trust has a consensus target price of $4.50, suggesting a potential upside of 8.96%. Given Diversified Healthcare Trust’s stronger consensus rating and higher possible upside, equities analysts clearly believe Diversified Healthcare Trust is more favorable than Medical Properties Trust.

Earnings & Valuation

This table compares Diversified Healthcare Trust and Medical Properties Trust”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diversified Healthcare Trust	$1.54 billion	1.26	-$285.89 million	($1.11)	-7.21
Medical Properties Trust	$972.02 million	2.54	-$277.05 million	($0.06)	-68.83

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

Summary

Diversified Healthcare Trust beats Medical Properties Trust on 9 of the 17 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 Medical Properties Trust

Medical Properties Trust, Inc. is a self-advised real estate investment trust formed to capitalize on the changing trends in healthcare delivery by acquiring and developing net-leased healthcare facilities. MPT’s financing model allows hospitals and other healthcare facilities to unlock the value of their underlying real estate in order to fund facility improvements, technology upgrades, staff additions and new construction. Facilities include acute care hospitals, inpatient rehabilitation hospitals, long-term acute care hospitals, and other medical and surgical facilities.