Aviv REIT (NASDAQ: AVIV) and HCP (NYSE:HCP) are both financials companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, risk, valuation, dividends, profitabiliy, analyst recommendations and institutional ownership.

Profitability

This table compares Aviv REIT and HCP’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aviv REIT 25.04% 6.86% 2.80%
HCP 32.16% 9.96% 4.19%

Institutional and Insider Ownership

88.9% of HCP shares are held by institutional investors. 0.2% of HCP shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Aviv REIT and HCP’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Aviv REIT N/A N/A N/A N/A N/A
HCP $2.02 billion 6.93 $1.17 billion $1.45 20.59

HCP has higher revenue and earnings than Aviv REIT.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Aviv REIT and HCP, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aviv REIT 0 0 0 0 N/A
HCP 1 14 2 0 2.06

HCP has a consensus price target of $32.69, indicating a potential upside of 9.52%. Given HCP’s higher possible upside, analysts plainly believe HCP is more favorable than Aviv REIT.

Dividends

HCP pays an annual dividend of $1.48 per share and has a dividend yield of 5.0%. Aviv REIT does not pay a dividend. HCP pays out 102.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

HCP beats Aviv REIT on 9 of the 10 factors compared between the two stocks.

Aviv REIT Company Profile

Aviv REIT, Inc. (AVIV) is a real estate investment trust (REIT). The Company is engaged in investments in healthcare properties, consisting primarily of skilled nursing facilities (SNFs), assisted living facilities (ALFs), and other healthcare properties located in the United States. It specializes in the ownership and triple-net leasing of post-acute and long-term care SNFs. Its leases include rent escalation provisions. The Company is the general partner of Aviv Healthcare Properties Limited Partnership. Its portfolio consists of approximately 346 properties, comprising 285 skilled nursing facilities, 35 assisted living facilities, 14 traumatic brain injury facilities, two long-term acute care hospitals, one neuro hospital, two independent living facilities, two medical office buildings, and five land parcels for development, with approximately 29,646 beds in 30 states triple-net leased to 37 operators.

HCP Company Profile

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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