W.P. Carey (NYSE:WPC – Get Free Report) and Diversified Healthcare Trust (NASDAQ:DHC – Get Free Report) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, earnings and valuation.
Institutional & Insider Ownership
73.7% of W.P. Carey shares are held by institutional investors. Comparatively, 76.0% of Diversified Healthcare Trust shares are held by institutional investors. 0.9% of W.P. Carey shares are held by insiders. Comparatively, 10.1% of Diversified Healthcare Trust shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Profitability
This table compares W.P. Carey and Diversified Healthcare Trust’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| W.P. Carey | 20.42% | 4.00% | 1.91% |
| Diversified Healthcare Trust | -18.83% | -14.69% | -5.69% |
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| W.P. Carey | $1.58 billion | 9.37 | $460.84 million | $1.52 | 44.58 |
| Diversified Healthcare Trust | $1.50 billion | 0.69 | -$370.26 million | ($1.19) | -3.60 |
W.P. Carey has higher revenue and earnings than Diversified Healthcare Trust. Diversified Healthcare Trust is trading at a lower price-to-earnings ratio than W.P. Carey, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
W.P. Carey has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, Diversified Healthcare Trust has a beta of 2.62, indicating that its stock price is 162% more volatile than the S&P 500.
Dividends
W.P. Carey pays an annual dividend of $3.60 per share and has a dividend yield of 5.3%. Diversified Healthcare Trust pays an annual dividend of $0.04 per share and has a dividend yield of 0.9%. W.P. Carey pays out 236.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Diversified Healthcare Trust pays out -3.4% of its earnings in the form of a dividend. W.P. Carey has raised its dividend for 2 consecutive years. W.P. Carey is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a summary of recent ratings for W.P. Carey and Diversified Healthcare Trust, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| W.P. Carey | 1 | 7 | 2 | 0 | 2.10 |
| Diversified Healthcare Trust | 1 | 0 | 0 | 1 | 2.50 |
W.P. Carey presently has a consensus target price of $66.33, suggesting a potential downside of 2.11%. Diversified Healthcare Trust has a consensus target price of $3.75, suggesting a potential downside of 12.38%. Given W.P. Carey’s higher possible upside, analysts clearly believe W.P. Carey is more favorable than Diversified Healthcare Trust.
Summary
W.P. Carey beats Diversified Healthcare Trust on 12 of the 18 factors compared between the two stocks.
About W.P. Carey
W. P. Carey ranks among the largest net lease REITs with a well-diversified portfolio of high-quality, operationally critical commercial real estate, which includes 1,424 net lease properties covering approximately 173 million square feet and a portfolio of 89 self-storage operating properties as of December 31, 2023. With offices in New York, London, Amsterdam and Dallas, the company remains focused on investing primarily in single-tenant, industrial, warehouse and retail properties located in the U.S. and Northern and Western Europe, under long-term net leases with built-in rent escalations.
About Diversified Healthcare Trust
Diversified Healthcare Trust is a real estate investment trust, which engages in the ownership of senior living communities, medical office buildings, and wellness centers. It operates through the following segments: Office Portfolio, Senior Housing Operating Portfolio (SHOP), and Non-Segment. The Office Portfolio segment consists of medical office properties leased to medical providers and other medical related businesses, as well as life science properties leased to biotech laboratories and other similar tenants. The SHOP segment manages senior living communities that offers short term and long term residential care, and other services for residents where it pay fees to the operator to manage the communities for its account. The company was founded on December 16, 1998 and is headquartered in Newton, MA.
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