Analyzing Global Medical REIT (GMRE) & Caretrust REIT (CTRE)

Global Medical REIT (NYSE: GMRE) and Caretrust REIT (NASDAQ:CTRE) are both small-cap financials companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Profitability

This table compares Global Medical REIT and Caretrust REIT’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Global Medical REIT -19.98% -2.86% -1.39%
Caretrust REIT 25.68% 5.76% 3.16%

Earnings & Valuation

This table compares Global Medical REIT and Caretrust REIT’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Global Medical REIT $8.21 million 19.21 -$6.35 million ($0.20) -36.45
Caretrust REIT $104.68 million 10.98 $29.35 million $0.46 32.91

Caretrust REIT has higher revenue and earnings than Global Medical REIT. Global Medical REIT is trading at a lower price-to-earnings ratio than Caretrust REIT, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

42.0% of Global Medical REIT shares are held by institutional investors. Comparatively, 90.6% of Caretrust REIT shares are held by institutional investors. 16.5% of Global Medical REIT shares are held by company insiders. Comparatively, 1.6% of Caretrust REIT shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

Global Medical REIT has a beta of -41.48, suggesting that its share price is 4,248% less volatile than the S&P 500. Comparatively, Caretrust REIT has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Global Medical REIT and Caretrust REIT, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Global Medical REIT 0 1 5 0 2.83
Caretrust REIT 0 3 5 0 2.63

Global Medical REIT currently has a consensus price target of $10.75, suggesting a potential upside of 47.46%. Caretrust REIT has a consensus price target of $19.63, suggesting a potential upside of 29.62%. Given Global Medical REIT’s stronger consensus rating and higher probable upside, research analysts clearly believe Global Medical REIT is more favorable than Caretrust REIT.

Dividends

Global Medical REIT pays an annual dividend of $0.80 per share and has a dividend yield of 11.0%. Caretrust REIT pays an annual dividend of $0.74 per share and has a dividend yield of 4.9%. Global Medical REIT pays out -400.0% of its earnings in the form of a dividend. Caretrust REIT pays out 160.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Global Medical REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Caretrust REIT beats Global Medical REIT on 9 of the 15 factors compared between the two stocks.

About Global Medical REIT

Global Medical REIT Inc. is engaged primarily in the acquisition of licensed, purpose-built healthcare facilities and the leasing of these facilities to clinical operators with market share. The Company’s strategy is to produce increasing, reliable rental revenue by expanding its portfolio, and leasing its healthcare facilities to market operators under long-term triple-net leases.

About Caretrust REIT

CareTrust REIT, Inc. is a self-administered, self-managed real estate investment trust. The Company is engaged in the ownership, acquisition and leasing of healthcare-related properties. It makes investments in healthcare-related real estate assets. As of December 31, 2016, its real estate portfolio included 154 skilled nursing facilities (SNFs), SNF Campuses, assisted living facilities and independent living facilities. As of December 31, 2016, the 93 facilities leased to The Ensign Group, Inc. had a total of 9,916 beds and units and are located in Arizona, California, Colorado, Idaho, Iowa, Nebraska, Nevada, Texas, Utah and Washington; the 16 facilities leased to affiliates of Pristine Senior Living, LLC had a total of 1,488 beds and units; and the 42 remaining leased properties had a total of 3,515 beds and units and are located in California, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Maryland, Michigan, Minnesota, North Carolina, Texas, Virginia, Washington and Wisconsin.

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