Head to Head Review: Healthcare Realty Trust (NYSE:HR) versus CareTrust REIT (NYSE:CTRE)

Healthcare Realty Trust (NYSE:HR) and CareTrust REIT (NYSE:CTRE) are both mid-cap real estate companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, risk, dividends, earnings and valuation.

Analyst Ratings

This is a summary of current ratings and target prices for Healthcare Realty Trust and CareTrust REIT, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Healthcare Realty Trust	0	7	5	0	2.42
CareTrust REIT	0	4	10	1	2.80

Healthcare Realty Trust currently has a consensus price target of $21.36, indicating a potential upside of 10.36%. CareTrust REIT has a consensus price target of $43.64, indicating a potential upside of 12.46%. Given CareTrust REIT’s stronger consensus rating and higher probable upside, analysts clearly believe CareTrust REIT is more favorable than Healthcare Realty Trust.

Risk and Volatility

Healthcare Realty Trust has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500. Comparatively, CareTrust REIT has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Healthcare Realty Trust	-3.96%	-1.02%	-0.49%
CareTrust REIT	62.19%	8.52%	6.64%

Valuation & Earnings

This table compares Healthcare Realty Trust and CareTrust REIT”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Healthcare Realty Trust	$1.18 billion	5.62	-$246.07 million	($0.14)	-138.27
CareTrust REIT	$476.39 million	19.25	$320.54 million	$1.59	24.41

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

Insider & Institutional Ownership

87.8% of CareTrust REIT shares are held by institutional investors. 0.6% of Healthcare Realty Trust shares are held by insiders. Comparatively, 0.7% of CareTrust REIT shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Healthcare Realty Trust pays an annual dividend of $0.96 per share and has a dividend yield of 5.0%. CareTrust REIT pays an annual dividend of $1.56 per share and has a dividend yield of 4.0%. Healthcare Realty Trust pays out -685.7% of its earnings in the form of a dividend. CareTrust REIT pays out 98.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CareTrust REIT has raised its dividend for 3 consecutive years. Healthcare Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

CareTrust REIT beats Healthcare Realty Trust on 14 of the 18 factors compared between the two stocks.

About Healthcare Realty Trust

Healthcare Realty Trust, Inc. provides real estate investment services. It owns, leases, manages, acquires, finances, develops, and redevelops income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States of America. The company was founded by David R. Emery in 1992 and is headquartered in Nashville, TN.

About CareTrust REIT

CareTrust REIT, Inc. is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. With a nationwide portfolio of long-term net-leased properties, and a growing portfolio of quality operators leasing them, CareTrust REIT is pursuing both external and organic growth opportunities across the United States.