Analyzing Smartstop Self Storage REIT (NYSE:SMA) and CareTrust REIT (NYSE:CTRE)

Smartstop Self Storage REIT (NYSE:SMA) and CareTrust REIT (NYSE:CTRE) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Dividends

Smartstop Self Storage REIT pays an annual dividend of $1.57 per share and has a dividend yield of 4.8%. CareTrust REIT pays an annual dividend of $1.56 per share and has a dividend yield of 4.2%. Smartstop Self Storage REIT pays out 1,046.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CareTrust REIT pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CareTrust REIT has increased its dividend for 3 consecutive years.

Profitability

This table compares Smartstop Self Storage REIT and CareTrust REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Smartstop Self Storage REIT	4.38%	1.00%	0.54%
CareTrust REIT	64.10%	8.65%	6.66%

Earnings & Valuation

This table compares Smartstop Self Storage REIT and CareTrust REIT”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smartstop Self Storage REIT	$294.00 million	6.15	-$1.55 million	$0.15	217.68
CareTrust REIT	$476.39 million	18.36	$320.54 million	$1.56	23.73

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

Risk and Volatility

Smartstop Self Storage REIT has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500. Comparatively, CareTrust REIT has a beta of 0.76, meaning that its stock price is 24% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Smartstop Self Storage REIT and CareTrust REIT, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smartstop Self Storage REIT	1	3	4	2	2.70
CareTrust REIT	0	2	10	1	2.92

Smartstop Self Storage REIT presently has a consensus target price of $36.81, indicating a potential upside of 12.74%. CareTrust REIT has a consensus target price of $44.82, indicating a potential upside of 21.05%. Given CareTrust REIT’s stronger consensus rating and higher probable upside, analysts clearly believe CareTrust REIT is more favorable than Smartstop Self Storage REIT.

Insider & Institutional Ownership

87.8% of CareTrust REIT shares are held by institutional investors. 5.5% of Smartstop Self Storage REIT shares are held by insiders. Comparatively, 0.7% of CareTrust REIT 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

CareTrust REIT beats Smartstop Self Storage REIT on 14 of the 18 factors compared between the two stocks.

About Smartstop Self Storage REIT

Symmetry Medical Inc. (Symmetry) is a medical device solutions company, including surgical instruments, orthopedic implants, and sterilization cases and trays. The Company designs, develops and offers worldwide production and supply chain capabilities for these products to customers in the orthopedic industry, and other medical device markets (including but not limited to arthroscopy, dental, laparoscopy, osteobiologic, and endoscopy segments). It also manufactures specialized non-healthcare products, primarily in the aerospace industry. The Company operates in two segments: original equipment manufacturer (OEM) solutions and symmetry surgical. On August 15, 2011, the Company acquired PSC Industries, Inc’s Olsen Medical division. On December 29, 2011 it acquired the surgical instruments product portfolio from Codman & Shurtleff, Inc., a Johnson & Johnson Company.

About CareTrust REIT

CareTrust REIT, Inc. is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. With a nationwide portfolio of long-term net-leased properties, and a growing portfolio of quality operators leasing them, CareTrust REIT is pursuing both external and organic growth opportunities across the United States.