Medical Properties Trust (NYSE: MPW) and Welltower (NYSE:HCN) are both mid-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Profitability

This table compares Medical Properties Trust and Welltower’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Medical Properties Trust 42.25% 7.54% 3.83%
Welltower 28.94% 8.74% 4.39%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Medical Properties Trust and Welltower, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Medical Properties Trust 2 4 6 0 2.33
Welltower 2 6 7 0 2.33

Medical Properties Trust currently has a consensus target price of $14.00, indicating a potential upside of 7.12%. Welltower has a consensus target price of $72.75, indicating a potential downside of 1.82%. Given Medical Properties Trust’s higher probable upside, research analysts plainly believe Medical Properties Trust is more favorable than Welltower.

Earnings and Valuation

This table compares Medical Properties Trust and Welltower’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Medical Properties Trust $610.24 million 7.80 $501.71 million $0.83 15.75
Welltower $4.19 billion 6.52 $2.05 billion $3.21 23.08

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

Risk & Volatility

Medical Properties Trust has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, Welltower has a beta of 0.24, meaning that its share price is 76% less volatile than the S&P 500.

Dividends

Medical Properties Trust pays an annual dividend of $0.96 per share and has a dividend yield of 7.3%. Welltower pays an annual dividend of $3.48 per share and has a dividend yield of 4.7%. Medical Properties Trust pays out 115.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Welltower pays out 108.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Medical Properties Trust has increased its dividend for 7 consecutive years and Welltower has increased its dividend for 3 consecutive years. Medical Properties Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

85.6% of Medical Properties Trust shares are owned by institutional investors. Comparatively, 86.0% of Welltower shares are owned by institutional investors. 1.0% of Medical Properties Trust shares are owned by insiders. Comparatively, 0.2% of Welltower shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Welltower beats Medical Properties Trust on 9 of the 16 factors compared between the two stocks.

About Medical Properties Trust

Medical Properties Trust, Inc. is a real estate investment trust (REIT). The Company focuses on investing in and owning net-leased healthcare facilities across the United States and selectively in foreign jurisdictions. The Company’s segment is its investments in healthcare real estate, including mortgage and other loans, as well as any equity investments in its tenants. The Company conducts its operations through MPT Operating Partnership, L.P. The Company acquires and develops healthcare facilities, and leases the facilities to healthcare operating companies under long-term net leases. The Company makes mortgage loans to healthcare operators collateralized by their real estate assets. As of February 24, 2017, the Company’s portfolio consisted of 232 properties, including 215 facilities (of the 220 facilities that it owns) were leased to 30 tenants, five were under development, and the remaining assets were in the form of mortgage loans to four operators.

About Welltower

Welltower Inc. invests with seniors housing operators, post-acute providers and health systems to fund real estate and infrastructure. The Company invests in seniors housing and healthcare real estate. It operates in three segments: triple-net, seniors housing operating and outpatient medical. Welltower, a real estate investment trust (REIT), owns interests in properties concentrated in markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities, and outpatient medical properties. Its triple-net properties include independent living facilities, independent supportive living facilities (Canada), continuing care retirement communities, assisted living facilities, care homes with and without nursing (the United Kingdom), Alzheimer’s/dementia care facilities, long-term/post-acute care facilities and hospitals. Its outpatient medical properties include outpatient medical buildings.

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