Reviewing Care Capital Properties (CCP) & MedEquities Realty Trust (MRT)
Care Capital Properties (NYSE: CCP) and MedEquities Realty Trust (NYSE:MRT) are both financials 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.
This is a breakdown of recent recommendations and price targets for Care Capital Properties and MedEquities Realty Trust, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Care Capital Properties||0||3||0||0||2.00|
|MedEquities Realty Trust||1||1||6||0||2.63|
Care Capital Properties currently has a consensus target price of $22.50, indicating a potential downside of 7.06%. MedEquities Realty Trust has a consensus target price of $13.00, indicating a potential upside of 9.70%. Given MedEquities Realty Trust’s stronger consensus rating and higher probable upside, analysts plainly believe MedEquities Realty Trust is more favorable than Care Capital Properties.
Insider and Institutional Ownership
88.9% of Care Capital Properties shares are owned by institutional investors. Comparatively, 92.9% of MedEquities Realty Trust shares are owned by institutional investors. 1.7% of Care Capital Properties shares are owned by insiders. Comparatively, 2.5% of MedEquities Realty Trust 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.
This table compares Care Capital Properties and MedEquities Realty Trust’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%|
|MedEquities Realty Trust||32.68%||5.58%||3.52%|
Earnings & Valuation
This table compares Care Capital Properties and MedEquities Realty Trust’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|
|MedEquities Realty Trust||$56.96 million||6.61||$46.67 million||$0.35||33.86|
MedEquities Realty Trust has higher revenue and earnings than Care Capital Properties. Care Capital Properties is trading at a lower price-to-earnings ratio than MedEquities Realty Trust, indicating that it is currently the more affordable of the two stocks.
Care Capital Properties pays an annual dividend of $2.28 per share and has a dividend yield of 9.4%. MedEquities Realty Trust pays an annual dividend of $0.84 per share and has a dividend yield of 7.1%. 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. MedEquities Realty Trust pays out 240.0% 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.
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 MedEquities Realty Trust
MedEquities Realty Trust, Inc. is a real estate investment trust (REIT). The Company invests in a diversified mix of healthcare properties and healthcare-related real estate debt investments. The Company invests primarily in real estate across the acute and post-acute spectrum of care. It focuses on investing in various types of healthcare properties, including acute care hospitals; skilled nursing facilities; short-stay surgical and specialty hospitals, which focus on orthopedic, heart and other dedicated surgeries and specialty procedures; dedicated specialty hospitals, such as inpatient rehabilitation facilities, long-term acute care hospitals and facilities providing psychiatric care; physician clinics; diagnostic facilities; outpatient surgery centers, and facilities that support these services, such as medical office buildings. As of September 30, 2016, the Company’s portfolio included 24 healthcare facilities and one healthcare-related debt investment.
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