Head to Head Review: Welltower (HCN) and Omega Healthcare Investors (OHI)
Welltower (NYSE: HCN) and Omega Healthcare Investors (NYSE:OHI) are both mid-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, earnings, risk, valuation and institutional ownership.
Valuation & Earnings
This table compares Welltower and Omega Healthcare Investors’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Welltower||$4.19 billion||5.99||$2.05 billion||$3.21||21.19|
|Omega Healthcare Investors||$926.66 million||6.65||$853.50 million||$1.89||16.53|
Welltower has higher revenue and earnings than Omega Healthcare Investors. Omega Healthcare Investors is trading at a lower price-to-earnings ratio than Welltower, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
85.9% of Welltower shares are owned by institutional investors. Comparatively, 72.8% of Omega Healthcare Investors shares are owned by institutional investors. 0.2% of Welltower shares are owned by insiders. Comparatively, 1.5% of Omega Healthcare Investors shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Welltower pays an annual dividend of $3.48 per share and has a dividend yield of 5.1%. Omega Healthcare Investors pays an annual dividend of $2.56 per share and has a dividend yield of 8.2%. 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. Omega Healthcare Investors pays out 135.5% 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 has raised its dividend for 7 consecutive years and Omega Healthcare Investors has raised its dividend for 7 consecutive years.
This is a summary of current ratings and recommmendations for Welltower and Omega Healthcare Investors, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Omega Healthcare Investors||0||2||0||0||2.00|
Welltower currently has a consensus target price of $72.69, suggesting a potential upside of 6.88%. Omega Healthcare Investors has a consensus target price of $31.50, suggesting a potential upside of 0.80%. Given Welltower’s stronger consensus rating and higher probable upside, equities analysts plainly believe Welltower is more favorable than Omega Healthcare Investors.
Risk and Volatility
Welltower has a beta of 0.24, indicating that its stock price is 76% less volatile than the S&P 500. Comparatively, Omega Healthcare Investors has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500.
This table compares Welltower and Omega Healthcare Investors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Omega Healthcare Investors||40.20%||8.88%||4.17%|
Welltower beats Omega Healthcare Investors on 10 of the 16 factors compared between the two stocks.
Welltower Company Profile
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.
Omega Healthcare Investors Company Profile
Omega Healthcare Investors, Inc. is a self-administered real estate investment trust (REIT). The Company maintains a portfolio of long-term healthcare facilities and mortgages on healthcare facilities located in the United States and the United Kingdom. It operates through the segment, which consists of investments in healthcare-related real estate properties. It provides lease or mortgage financing to qualified operators of skilled nursing facilities (SNFs) and assisted living facilities (ALFs), independent living facilities, rehabilitation and acute care facilities. Its portfolio consists of long-term leases and mortgage agreements. As of December 31, 2016, its portfolio of investments included 996 healthcare facilities located in 42 states and the United Kingdom and operated by 79 third-party operators. As of December 31, 2016, the Company’s portfolio consisted of 809 SNFs, 101 ALFs, 16 specialty facilities, one medical office building, fixed rate mortgages on 44 SNFs and two ALFs.
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