Care Capital Properties (NYSE: CCP) and Sabra Healthcare REIT (NASDAQ:SBRA) are both financials companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, profitability, analyst recommendations and valuation.

Profitability

This table compares Care Capital Properties and Sabra Healthcare REIT’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Care Capital Properties 109.47% 40.07% 16.26%
Sabra Healthcare REIT 34.99% 8.72% 3.90%

Dividends

Care Capital Properties pays an annual dividend of $2.28 per share and has a dividend yield of 9.4%. Sabra Healthcare REIT pays an annual dividend of $1.44 per share and has a dividend yield of 6.4%. Care Capital Properties pays out 121.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sabra Healthcare REIT pays out 122.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Care Capital Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

88.9% of Care Capital Properties shares are held by institutional investors. Comparatively, 99.3% of Sabra Healthcare REIT shares are held by institutional investors. 1.7% of Care Capital Properties shares are held by company insiders. Comparatively, 2.3% of Sabra Healthcare REIT shares are held by company 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 breakdown of current recommendations for Care Capital Properties and Sabra Healthcare REIT, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Care Capital Properties 0 3 1 0 2.25
Sabra Healthcare REIT 1 2 3 0 2.33

Care Capital Properties currently has a consensus target price of $26.00, indicating a potential upside of 7.39%. Sabra Healthcare REIT has a consensus target price of $25.50, indicating a potential upside of 14.15%. Given Sabra Healthcare REIT’s stronger consensus rating and higher probable upside, analysts plainly believe Sabra Healthcare REIT is more favorable than Care Capital Properties.

Volatility & Risk

Care Capital Properties has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500. Comparatively, Sabra Healthcare REIT has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500.

Earnings & Valuation

This table compares Care Capital Properties and Sabra Healthcare REIT’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Care Capital Properties N/A N/A N/A $1.88 12.88
Sabra Healthcare REIT $251.10 million 5.82 $210.73 million $1.18 18.93

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

Summary

Sabra Healthcare REIT beats Care Capital Properties on 7 of the 13 factors compared between the two stocks.

About Care Capital Properties

Care Capital Properties, Inc. is a self-administered, self-managed real estate investment trust with a diversified portfolio of skilled nursing facilities (SNFs) and other healthcare assets operated by private regional and local care providers. The Company leases its properties to unaffiliated tenants under long-term triple-net leases, pursuant to which the tenants are obligated to pay all property-related expenses, including maintenance, utilities, repairs and taxes. It also manages a small portfolio of secured and unsecured loans, made primarily to its SNF operators and other post-acute care providers. As of December 31, 2016, its portfolio consisted of 345 properties operated by 38 private regional and local care providers, spread across 36 states and containing a total of approximately 38,000 beds/units. It conducts all of its operations through its operating partnership, Care Capital Properties, LP, and its subsidiaries.

About Sabra Healthcare REIT

Sabra Health Care REIT, Inc. is a real estate investment trust. The Company, through its subsidiaries, owns and invests in real estate serving the healthcare industry. The Company’s segment includes investments in healthcare-related real estate properties. The Company’s primary business consists of acquiring, financing and owning real estate property to be leased to third-party tenants in the healthcare sector. As of December 31, 2016, the Company’s investment portfolio consisted of 183 real estate properties held for investment (consisting of 97 skilled nursing/transitional care facilities, 85 senior housing facilities, and one acute care hospital); 10 investments in loans receivable (consisting of four mortgage loans, one construction loan, one mezzanine loan, three pre-development loans and one debtor-in-possession (DIP) loan) and 12 preferred equity investments. It has properties located in New Hampshire, Texas, Florida, Kentucky, Ohio, Maryland and Nebraska, among others.

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