Universal Health Realty Income Trust (NYSE: WSR) and Whitestone REIT (NYSE:WSR) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their profitability, valuation, dividends, earnings, analyst recommendations, institutional ownership and risk.

Insider and Institutional Ownership

61.5% of Universal Health Realty Income Trust shares are owned by institutional investors. Comparatively, 50.2% of Whitestone REIT shares are owned by institutional investors. 1.8% of Universal Health Realty Income Trust shares are owned by company insiders. Comparatively, 5.3% of Whitestone REIT shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Universal Health Realty Income Trust and Whitestone REIT’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Universal Health Realty Income Trust 33.86% 9.91% 4.24%
Whitestone REIT 7.19% 2.73% 0.90%

Dividends

Universal Health Realty Income Trust pays an annual dividend of $2.68 per share and has a dividend yield of 3.7%. Whitestone REIT pays an annual dividend of $1.14 per share and has a dividend yield of 8.5%. Whitestone REIT pays out 91.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Universal Health Realty Income Trust has increased its dividend for 32 consecutive years.

Analyst Recommendations

This is a breakdown of current recommendations for Universal Health Realty Income Trust and Whitestone REIT, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Universal Health Realty Income Trust 0 0 0 0 N/A
Whitestone REIT 1 1 4 0 2.50

Whitestone REIT has a consensus price target of $13.10, suggesting a potential downside of 2.24%. Given Whitestone REIT’s higher probable upside, analysts clearly believe Whitestone REIT is more favorable than Universal Health Realty Income Trust.

Valuation and Earnings

This table compares Universal Health Realty Income Trust and Whitestone REIT’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Universal Health Realty Income Trust $72.35 million 13.59 $45.61 million N/A N/A
Whitestone REIT $125.96 million 4.23 $8.33 million $1.25 10.72

Universal Health Realty Income Trust has higher earnings, but lower revenue than Whitestone REIT.

Volatility & Risk

Universal Health Realty Income Trust has a beta of 0.3, indicating that its stock price is 70% less volatile than the S&P 500. Comparatively, Whitestone REIT has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.

Summary

Universal Health Realty Income Trust beats Whitestone REIT on 9 of the 15 factors compared between the two stocks.

Universal Health Realty Income Trust Company Profile

Universal Health Realty Income Trust, a real estate investment trust, invests in healthcare and human service related facilities including acute care hospitals, rehabilitation hospitals, sub-acute care facilities, medical/office buildings, free-standing emergency departments and childcare centers. We have investments in sixty-nine properties located in twenty states.

Whitestone REIT Company Profile

Whitestone is a community-centered retail REIT that acquires, owns, manages, develops and redevelops high quality "e-commerce resistant" neighborhood, community and lifestyle retail centers principally located in the largest, fastest-growing and most affluent markets in the Sunbelt. Whitestone's optimal mix of national, regional and local tenants provide daily necessities, needed services and entertainment to the communities in which they are located. Whitestone's properties are primarily located in business-friendly Phoenix, Austin, Dallas-Fort Worth, Houston and San Antonio, which are among the fastest growing U.S. population centers with highly educated workforces, high household incomes and strong job growth.

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