Universal Health Realty Income Trust (NYSE: UHT) and LTC Properties (NYSE:LTC) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Analyst Recommendations

This is a breakdown of current ratings for Universal Health Realty Income Trust and LTC Properties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Universal Health Realty Income Trust 0 0 0 0 N/A
LTC Properties 1 5 2 0 2.13

LTC Properties has a consensus target price of $50.60, indicating a potential upside of 3.60%. Given LTC Properties’ higher probable upside, analysts clearly believe LTC Properties is more favorable than Universal Health Realty Income Trust.

Insider & Institutional Ownership

59.2% of Universal Health Realty Income Trust shares are held by institutional investors. Comparatively, 81.4% of LTC Properties shares are held by institutional investors. 1.9% of Universal Health Realty Income Trust shares are held by insiders. Comparatively, 1.7% of LTC Properties shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk and Volatility

Universal Health Realty Income Trust has a beta of 0.34, meaning that its stock price is 66% less volatile than the S&P 500. Comparatively, LTC Properties has a beta of 0.15, meaning that its stock price is 85% less volatile than the S&P 500.

Profitability

This table compares Universal Health Realty Income Trust and LTC Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Universal Health Realty Income Trust 62.40% 8.23% 3.27%
LTC Properties 53.36% 11.99% 6.41%

Valuation and Earnings

This table compares Universal Health Realty Income Trust and LTC Properties’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Universal Health Realty Income Trust $74.03 million 13.70 $51.20 million $3.23 23.08
LTC Properties $167.79 million 11.52 $147.45 million $2.28 21.42

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

Dividends

Universal Health Realty Income Trust pays an annual dividend of $2.64 per share and has a dividend yield of 3.5%. LTC Properties pays an annual dividend of $2.28 per share and has a dividend yield of 4.7%. Universal Health Realty Income Trust pays out 81.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. LTC Properties pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Universal Health Realty Income Trust has increased its dividend for 31 consecutive years and LTC Properties has increased its dividend for 5 consecutive years.

About Universal Health Realty Income Trust

Universal Health Realty Income Trust is a real estate investment trust (REIT). The Company invests in healthcare and human service related facilities, including acute care hospitals, rehabilitation hospitals, sub-acute facilities, surgery centers, free-standing emergency departments, childcare centers and medical office buildings (MOBs). As of February 28, 2017, the Company had 67 real estate investments located in 20 states in the United States consisting of six hospital facilities, including three acute care, one rehabilitation and two sub-acute; 54 MOBs; three free-standing emergency departments (FEDs), and four preschool and childcare centers. The Company’s facilities include Southwest Healthcare System, Inland Valley Campus, Wellington Regional Medical Center, Kindred Hospital Chicago Central, Vibra Hospital of Corpus Christi, Chesterbrook Academy, and Desert Valley Medical Center.

About LTC Properties

LTC Properties Inc. is a healthcare real estate investment trust (REIT). The Company invests in senior housing and healthcare properties through sale-leaseback transactions, mortgage financing and structured finance solutions, including mezzanine lending. It invests in various properties, including Skilled nursing facilities (SNF), Assisted living facilities (ALF), Independent living facilities (ILF), Memory care facilities (MC) and Range of care facilities (ROC). SNF provides restorative, rehabilitative and nursing care. Many skilled nursing facilities provide ancillary services that include occupational, speech, physical, respiratory and IV therapies, as well as sub-acute care services, which are paid either by the patient, the patient’s family, private health insurance, or through the federal Medicare or state Medicaid programs. ALF serves people requiring assistance with activities of daily living, but do not require the constant supervision skilled nursing facilities provide.

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