Critical Review: Universal Health Realty Income Trust (NYSE:UHT) vs. Terreno Realty (NYSE:TRNO)

Universal Health Realty Income Trust (NYSE:UHT) and Terreno Realty (NYSE:TRNO) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Analyst Ratings

This is a summary of recent recommendations for Universal Health Realty Income Trust and Terreno Realty, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Universal Health Realty Income Trust	0	1	0	0	2.00
Terreno Realty	0	7	4	0	2.36

Terreno Realty has a consensus target price of $65.00, suggesting a potential upside of 11.74%. Given Terreno Realty’s stronger consensus rating and higher probable upside, analysts clearly believe Terreno Realty is more favorable than Universal Health Realty Income Trust.

Dividends

Universal Health Realty Income Trust pays an annual dividend of $2.96 per share and has a dividend yield of 7.6%. Terreno Realty pays an annual dividend of $2.08 per share and has a dividend yield of 3.6%. Universal Health Realty Income Trust pays out 229.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Terreno Realty pays out 82.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Universal Health Realty Income Trust has increased its dividend for 2 consecutive years and Terreno Realty has increased its dividend for 5 consecutive years.

Institutional and Insider Ownership

64.7% of Universal Health Realty Income Trust shares are held by institutional investors. 2.2% of Universal Health Realty Income Trust shares are held by insiders. Comparatively, 2.4% of Terreno Realty shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Universal Health Realty Income Trust and Terreno Realty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Universal Health Realty Income Trust	18.06%	10.63%	3.13%
Terreno Realty	59.56%	6.71%	5.28%

Earnings and Valuation

This table compares Universal Health Realty Income Trust and Terreno Realty”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Universal Health Realty Income Trust	$99.36 million	5.44	$19.23 million	$1.29	30.17
Terreno Realty	$426.00 million	14.11	$184.50 million	$2.52	23.08

Terreno Realty has higher revenue and earnings than Universal Health Realty Income Trust. Terreno Realty is trading at a lower price-to-earnings ratio than Universal Health Realty Income Trust, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Universal Health Realty Income Trust has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500. Comparatively, Terreno Realty has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500.

Summary

Terreno Realty beats Universal Health Realty Income Trust on 13 of the 17 factors compared between the two stocks.

About Universal Health Realty Income Trust

Universal Health Realty Income Trust, a real estate investment trust, invests in healthcare and human-service related facilities including acute care hospitals, behavioral health care hospitals, specialty facilities, medical/office buildings, free-standing emergency departments and childcare centers. We have investments or commitments in seventy-six properties located in twenty-one states.

About Terreno Realty

Terreno Realty Corporation (Terreno, and together with its subsidiaries, the Company) acquires, owns and operates industrial real estate in six major coastal U.S. markets: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C. All square feet, acres, occupancy and number of properties disclosed in these notes to the consolidated financial statements are unaudited. As of December 31, 2023, the Company owned 259 buildings aggregating approximately 16.0 million square feet, 45 improved land parcels consisting of approximately 152.4 acres, seven properties under development or redevelopment and approximately 62.7 acres of land entitled for future development. The Company is an internally managed Maryland corporation and elected to be taxed as a real estate investment trust (REIT) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the Code), commencing with its taxable year ended December 31, 2010.