Community Healthcare Trust (NYSE: CHCT) and HCP (NYSE:HCP) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, institutional ownership and risk.

Volatility and Risk

Community Healthcare Trust has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500. Comparatively, HCP has a beta of 0.33, suggesting that its share price is 67% less volatile than the S&P 500.

Dividends

Community Healthcare Trust pays an annual dividend of $1.58 per share and has a dividend yield of 5.9%. HCP pays an annual dividend of $1.48 per share and has a dividend yield of 5.5%. Community Healthcare Trust pays out 752.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. HCP pays out 264.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Community Healthcare Trust and HCP, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Community Healthcare Trust 0 0 1 0 3.00
HCP 1 10 3 0 2.14

Community Healthcare Trust currently has a consensus price target of $26.50, indicating a potential downside of 1.45%. HCP has a consensus price target of $31.42, indicating a potential upside of 17.31%. Given HCP’s higher probable upside, analysts plainly believe HCP is more favorable than Community Healthcare Trust.

Valuation and Earnings

This table compares Community Healthcare Trust and HCP’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Community Healthcare Trust $25.20 million 19.30 $2.72 million $0.21 128.05
HCP $2.13 billion 5.90 $627.74 million $0.56 47.82

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

Profitability

This table compares Community Healthcare Trust and HCP’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Community Healthcare Trust 8.86% 1.40% 1.00%
HCP 27.31% 8.85% 3.62%

Institutional & Insider Ownership

85.5% of Community Healthcare Trust shares are held by institutional investors. Comparatively, 90.2% of HCP shares are held by institutional investors. 5.5% of Community Healthcare Trust shares are held by insiders. Comparatively, 0.2% of HCP 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.

Summary

HCP beats Community Healthcare Trust on 10 of the 16 factors compared between the two stocks.

Community Healthcare Trust Company Profile

Community Healthcare Trust Incorporated is an integrated healthcare real estate company. The Company owns and acquires, or finances, real estate properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers in non-urban markets. It has investments in healthcare real estate, including mortgage and other loans. The Company’s medical office buildings are located in areas, such as, Florida, Georgia, Illinois, Kentucky, Ohio and Texas. Its physician clinics are located in Alabama, Florida, Kansas, Pennsylvania and Wisconsin. Its surgical centers and hospitals are located in areas, such as Louisiana, Michigan and Arizona. Its behavioral facilities are located in Indiana and Illinois. Its specialty centers are located in Texas, Colorado and Alabama, among others. As of December 31, 2016, the Company had interests in 57 real estate properties and one mortgage note, located in 22 states, totaling over 1.33 million square feet in the aggregate.

HCP Company Profile

HCP, Inc. is a self-administered real estate investment trust. The Company invests in real estate serving the healthcare industry in the United States. The Company’s segments include senior housing triple-net (SH NNN), senior housing operating portfolio (SHOP), life science and medical office. Its senior housing facilities include independent living facilities, assisted living facilities, memory care facilities, care homes, and continuing care retirement communities. Its Life science properties contain laboratory and office space for biotechnology, medical device and pharmaceutical companies, scientific research institutions, government agencies and other organizations. Its Medical office buildings contain physicians’ offices and examination rooms, and may include pharmacies, hospital ancillary service space and outpatient services. As of December 31, 2016, it had interests in and managed 15 hospitals, 61 care homes in the United Kingdom and five post-acute/skilled nursing facilities.

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