Head-To-Head Analysis: Ventas (VTR) vs. HCP (NYSE:HCP)
Ventas (NYSE: VTR) and HCP (NYSE:HCP) are both large-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitabiliy, analyst recommendations, valuation, institutional ownership, risk and dividends.
This is a breakdown of recent ratings and recommmendations for Ventas and HCP, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Ventas currently has a consensus target price of $64.14, indicating a potential downside of 4.85%. HCP has a consensus target price of $32.69, indicating a potential upside of 2.45%. Given HCP’s stronger consensus rating and higher probable upside, analysts plainly believe HCP is more favorable than Ventas.
Insider and Institutional Ownership
89.2% of Ventas shares are owned by institutional investors. Comparatively, 88.4% of HCP shares are owned by institutional investors. 1.3% of Ventas shares are owned by insiders. Comparatively, 0.2% of HCP shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Volatility and Risk
Ventas has a beta of 0.08, indicating that its stock price is 92% less volatile than the S&P 500. Comparatively, HCP has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500.
Ventas pays an annual dividend of $3.10 per share and has a dividend yield of 4.6%. HCP pays an annual dividend of $1.48 per share and has a dividend yield of 4.6%. 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. HCP pays out 72.2% of its earnings in the form of a dividend. HCP has increased its dividend for 6 consecutive years. HCP is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares Ventas and HCP’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Ventas||$3.48 billion||6.87||$1.85 billion||$1.97||34.22|
|HCP||$2.10 billion||7.12||$1.28 billion||$2.05||15.57|
Ventas has higher revenue and earnings than HCP. HCP is trading at a lower price-to-earnings ratio than Ventas, indicating that it is currently the more affordable of the two stocks.
This table compares Ventas and HCP’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
HCP beats Ventas on 12 of the 17 factors compared between the two stocks.
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.
HCP, Inc. is a self-administered real estate investment trust. The Company invests in real estate serving the healthcare industry in the United States. The Company’s segments include senior housing triple-net (SH NNN), senior housing operating portfolio (SHOP), life science and medical office. Its senior housing facilities include independent living facilities, assisted living facilities, memory care facilities, care homes, and continuing care retirement communities. Its Life science properties contain laboratory and office space for biotechnology, medical device and pharmaceutical companies, scientific research institutions, government agencies and other organizations. Its Medical office buildings contain physicians’ offices and examination rooms, and may include pharmacies, hospital ancillary service space and outpatient services. As of December 31, 2016, it had interests in and managed 15 hospitals, 61 care homes in the United Kingdom and five post-acute/skilled nursing facilities.
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