National Health Investors (NYSE: NHI) and Ventas (NYSE:VTR) are both mid-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their profitabiliy, valuation, dividends, earnings, analyst recommendations, institutional ownership and risk.

Dividends

National Health Investors pays an annual dividend of $3.80 per share and has a dividend yield of 4.9%. Ventas pays an annual dividend of $3.10 per share and has a dividend yield of 4.5%. National Health Investors pays out 92.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ventas pays out 157.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. National Health Investors has increased its dividend for 7 consecutive years and Ventas has increased its dividend for 6 consecutive years. National Health Investors is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares National Health Investors and Ventas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National Health Investors 63.72% 13.36% 6.76%
Ventas 20.10% 6.34% 2.83%

Insider and Institutional Ownership

69.1% of National Health Investors shares are owned by institutional investors. Comparatively, 89.1% of Ventas shares are owned by institutional investors. 5.2% of National Health Investors shares are owned by company insiders. Comparatively, 1.3% of Ventas 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.

Earnings & Valuation

This table compares National Health Investors and Ventas’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
National Health Investors $255.06 million 12.37 $233.77 million $4.12 18.69
Ventas $3.48 billion 7.00 $1.85 billion $1.97 34.85

Ventas has higher revenue and earnings than National Health Investors. National Health Investors is trading at a lower price-to-earnings ratio than Ventas, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations for National Health Investors and Ventas, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Health Investors 1 3 2 0 2.17
Ventas 3 9 0 0 1.75

National Health Investors currently has a consensus price target of $78.80, suggesting a potential upside of 2.34%. Ventas has a consensus price target of $64.14, suggesting a potential downside of 6.57%. Given National Health Investors’ stronger consensus rating and higher probable upside, research analysts clearly believe National Health Investors is more favorable than Ventas.

Volatility & Risk

National Health Investors has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, Ventas has a beta of 0.08, indicating that its stock price is 92% less volatile than the S&P 500.

Summary

National Health Investors beats Ventas on 13 of the 17 factors compared between the two stocks.

About National Health Investors

National Health Investors, Inc. is a self-managed real estate investment trust (REIT) specializing in sale-leaseback, joint-venture, mortgage and mezzanine financing of need-driven and discretionary senior housing and medical investments. The Company is engaged in the business of owning and financing healthcare properties. Its portfolio consists of lease, mortgage and other note investments in independent living facilities, assisted living facilities, entrance-fee communities, senior living campuses, skilled nursing facilities, specialty hospitals and medical office buildings. Its other investments include marketable securities and a joint venture structured to comply with the provisions of the REIT Investment Diversification Empowerment Act of 2007 (RIDEA) through which it invests in facility operations managed by an independent third party. As of December 31, 2016, it had investments in real estate, mortgage and other notes receivable involving 205 facilities located in 32 states.

About Ventas

Ventas, Inc. is a real estate investment trust (REIT) with its properties located throughout the United States, Canada and the United Kingdom. The Company operates through three segments: triple-net leased properties, senior living operations and office operations. Under its triple-net leased properties segment, the Company invests in and owns seniors housing and healthcare properties throughout the United States and the United Kingdom and leases those properties to healthcare operating companies under triple-net or absolute-net leases that obligate the tenants to pay all property-related expenses. In its senior living operations segment, it invests in seniors housing communities throughout the United States and Canada and engages independent operators to manage those communities. In its office operations segment, the Company primarily acquires, owns, develops, leases and manages medical office buildings (MOBs) and life science and innovation centers throughout the United States.

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