CareTrust REIT (NASDAQ: CTRE) and Healthcare Trust of America (NYSE:HTA) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, profitabiliy, valuation, risk and institutional ownership.

Institutional and Insider Ownership

87.5% of CareTrust REIT shares are owned by institutional investors. Comparatively, 93.4% of Healthcare Trust of America shares are owned by institutional investors. 1.6% of CareTrust REIT shares are owned by insiders. Comparatively, 1.5% of Healthcare Trust of America shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CareTrust REIT 0 4 3 0 2.43
Healthcare Trust of America 0 0 8 1 3.11

CareTrust REIT presently has a consensus price target of $17.67, suggesting a potential downside of 2.50%. Healthcare Trust of America has a consensus price target of $34.50, suggesting a potential upside of 15.73%. Given Healthcare Trust of America’s stronger consensus rating and higher possible upside, analysts plainly believe Healthcare Trust of America is more favorable than CareTrust REIT.

Dividends

Healthcare Trust of America pays an annual dividend of $1.20 per share and has a dividend yield of 4.0%. CareTrust REIT does not pay a dividend. Healthcare Trust of America pays out 571.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CareTrust REIT has increased its dividend for 4 consecutive years.

Volatility & Risk

CareTrust REIT has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, Healthcare Trust of America has a beta of 0.32, indicating that its share price is 68% less volatile than the S&P 500.

Earnings & Valuation

This table compares CareTrust REIT and Healthcare Trust of America’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CareTrust REIT $118.79 million 11.58 $96.91 million $0.45 40.27
Healthcare Trust of America $504.67 million 11.85 $301.67 million $0.21 141.95

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

Profitability

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

Net Margins Return on Equity Return on Assets
CareTrust REIT 24.02% 5.76% 3.03%
Healthcare Trust of America 6.07% 1.42% 0.70%

Summary

Healthcare Trust of America beats CareTrust REIT on 10 of the 18 factors compared between the two stocks.

About CareTrust REIT

CareTrust REIT, Inc. is a self-administered, self-managed real estate investment trust. The Company is engaged in the ownership, acquisition and leasing of healthcare-related properties. It makes investments in healthcare-related real estate assets. As of December 31, 2016, its real estate portfolio included 154 skilled nursing facilities (SNFs), SNF Campuses, assisted living facilities and independent living facilities. As of December 31, 2016, the 93 facilities leased to The Ensign Group, Inc. had a total of 9,916 beds and units and are located in Arizona, California, Colorado, Idaho, Iowa, Nebraska, Nevada, Texas, Utah and Washington; the 16 facilities leased to affiliates of Pristine Senior Living, LLC had a total of 1,488 beds and units; and the 42 remaining leased properties had a total of 3,515 beds and units and are located in California, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Maryland, Michigan, Minnesota, North Carolina, Texas, Virginia, Washington and Wisconsin.

About Healthcare Trust of America

Healthcare Trust of America, Inc. is a real estate investment trust. The Company is an owner and operator of medical office buildings (MOBs) in the United States. The Company focuses on owning and operating MOBs that serve healthcare delivery and are located on health system campuses, near university medical centers, or in community core outpatient locations. As of December 31, 2016, the Company’s portfolio consisted of approximately 17.7 million square feet of gross leasable area. As of December 31, 2016, the Company’s portfolio included MOBs, such as single-tenant and multi-tenant, and other healthcare facilities, such as hospitals and senior care. As of December 31, 2016, the Company’s portfolio had 355 buildings located in 31 states. As of December 31, 2016, the Company’s properties were located in various states of the United States, such as Alabama, Arizona, California, Colorado, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Maryland, Michigan, Minnesota, Nevada and Utah.

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