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

Dividends

MedEquities Realty Trust pays an annual dividend of $0.84 per share and has a dividend yield of 7.5%. Sabra Healthcare REIT pays an annual dividend of $2.08 per share and has a dividend yield of 10.8%. MedEquities Realty Trust pays out 210.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sabra Healthcare REIT pays out 221.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation & Earnings

This table compares MedEquities Realty Trust and Sabra Healthcare REIT’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MedEquities Realty Trust $49.30 million 7.18 $11.05 million $0.40 27.88
Sabra Healthcare REIT $260.53 million 13.22 $70.27 million $0.94 20.55

Sabra Healthcare REIT has higher revenue and earnings than MedEquities Realty Trust. Sabra Healthcare REIT 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.

Analyst Ratings

This is a summary of current recommendations and price targets for MedEquities Realty Trust and Sabra Healthcare REIT, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MedEquities Realty Trust 1 1 4 0 2.50
Sabra Healthcare REIT 1 4 4 0 2.33

MedEquities Realty Trust currently has a consensus target price of $13.00, suggesting a potential upside of 16.59%. Sabra Healthcare REIT has a consensus target price of $24.33, suggesting a potential upside of 25.95%. Given Sabra Healthcare REIT’s higher probable upside, analysts clearly believe Sabra Healthcare REIT is more favorable than MedEquities Realty Trust.

Institutional & Insider Ownership

93.2% of MedEquities Realty Trust shares are held by institutional investors. Comparatively, 85.5% of Sabra Healthcare REIT shares are held by institutional investors. 2.5% of MedEquities Realty Trust shares are held by insiders. Comparatively, 2.6% of Sabra Healthcare REIT shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares MedEquities Realty Trust and Sabra Healthcare REIT’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MedEquities Realty Trust 35.61% 5.88% 3.89%
Sabra Healthcare REIT 25.79% 4.86% 2.33%

Volatility & Risk

MedEquities Realty Trust has a beta of -0.75, indicating that its share price is 175% less volatile than the S&P 500. Comparatively, Sabra Healthcare REIT has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500.

Summary

Sabra Healthcare REIT beats MedEquities Realty Trust on 8 of the 15 factors compared between the two stocks.

MedEquities Realty Trust Company Profile

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.

Sabra Healthcare REIT Company Profile

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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