Medical Properties Trust (NYSE:MPT) and Community Healthcare Trust (NYSE:CHCT) Critical Review

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

Risk and Volatility

Community Healthcare Trust has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500. Comparatively, Medical Properties Trust has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.

Insider & Institutional Ownership

87.8% of Community Healthcare Trust shares are owned by institutional investors. Comparatively, 71.8% of Medical Properties Trust shares are owned by institutional investors. 5.3% of Community 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 large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Community Healthcare Trust and Medical Properties Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Community Healthcare Trust	0	3	2	0	2.40
Medical Properties Trust	2	1	0	0	1.33

Community Healthcare Trust presently has a consensus price target of $18.50, indicating a potential upside of 28.69%. Medical Properties Trust has a consensus price target of $4.15, indicating a potential upside of 15.92%. Given Community Healthcare Trust’s stronger consensus rating and higher probable upside, equities analysts clearly believe Community Healthcare Trust is more favorable than Medical Properties Trust.

Profitability

This table compares Community Healthcare Trust and Medical Properties Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Community Healthcare Trust	16.81%	4.96%	2.10%
Medical Properties Trust	-2.96%	-0.66%	-0.20%

Valuation & Earnings

This table compares Community Healthcare Trust and Medical Properties Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Community Healthcare Trust	$121.19 million	3.40	$5.10 million	$0.67	21.46
Medical Properties Trust	$972.02 million	2.20	-$277.05 million	($0.06)	-59.67

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

Dividends

Community Healthcare Trust pays an annual dividend of $1.32 per share and has a dividend yield of 9.2%. Medical Properties Trust pays an annual dividend of $0.36 per share and has a dividend yield of 10.1%. Community Healthcare Trust pays out 197.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Medical Properties Trust pays out -600.0% of its earnings in the form of a dividend. Community Healthcare Trust has increased its dividend for 3 consecutive years. Medical Properties Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Community Healthcare Trust beats Medical Properties Trust on 13 of the 17 factors compared between the two stocks.

About Community Healthcare Trust

Community Healthcare Trust Incorporated (the Company”, we”, our”) was organized in the State of Maryland on March 28, 2014. The Company is a fully-integrated healthcare real estate company that owns and acquires real estate properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers. As of March 31, 2024, the Company had investments of approximately $1.1 billion in 197 real estate properties (including a portion of one property accounted for as a sales-type lease with a gross amount totaling approximately $3.0 million and two properties classified as an asset held for sale with an aggregate amount totaling approximately $7.5 million. The properties are located in 35 states, totaling approximately 4.4 million square feet in the aggregate and were approximately 92.3% leased, excluding real estate assets held for sale, at March 31, 2024 with a weighted average remaining lease term of approximately 6.9 years.

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.