Reviewing Alexandria Real Estate Equities (NYSE:ARE) and CareTrust REIT (NYSE:CTRE)

CareTrust REIT (NYSE:CTRE) and Alexandria Real Estate Equities (NYSE:ARE) are both mid-cap real estate companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.

Profitability

This table compares CareTrust REIT and Alexandria Real Estate Equities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CareTrust REIT	62.19%	8.52%	6.64%
Alexandria Real Estate Equities	-36.08%	-5.21%	-2.92%

Dividends

CareTrust REIT pays an annual dividend of $1.56 per share and has a dividend yield of 4.0%. Alexandria Real Estate Equities pays an annual dividend of $2.88 per share and has a dividend yield of 6.0%. CareTrust REIT pays out 98.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alexandria Real Estate Equities pays out -47.5% of its earnings in the form of a dividend. CareTrust REIT has raised its dividend for 3 consecutive years and Alexandria Real Estate Equities has raised its dividend for 15 consecutive years. Alexandria Real Estate Equities is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for CareTrust REIT and Alexandria Real Estate Equities, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CareTrust REIT	0	3	8	2	2.92
Alexandria Real Estate Equities	4	10	2	0	1.88

CareTrust REIT presently has a consensus price target of $44.82, suggesting a potential upside of 15.48%. Alexandria Real Estate Equities has a consensus price target of $52.62, suggesting a potential upside of 9.33%. Given CareTrust REIT’s stronger consensus rating and higher probable upside, equities analysts plainly believe CareTrust REIT is more favorable than Alexandria Real Estate Equities.

Valuation & Earnings

This table compares CareTrust REIT and Alexandria Real Estate Equities”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CareTrust REIT	$476.39 million	19.25	$320.54 million	$1.59	24.41
Alexandria Real Estate Equities	$2.76 billion	3.04	-$1.43 billion	($6.06)	-7.94

CareTrust REIT has higher earnings, but lower revenue than Alexandria Real Estate Equities. Alexandria Real Estate Equities is trading at a lower price-to-earnings ratio than CareTrust REIT, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

87.8% of CareTrust REIT shares are owned by institutional investors. Comparatively, 96.5% of Alexandria Real Estate Equities shares are owned by institutional investors. 0.7% of CareTrust REIT shares are owned by company insiders. Comparatively, 1.4% of Alexandria Real Estate Equities shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

CareTrust REIT has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500. Comparatively, Alexandria Real Estate Equities has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500.

Summary

CareTrust REIT beats Alexandria Real Estate Equities on 11 of the 18 factors compared between the two stocks.

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.

About Alexandria Real Estate Equities

Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P 500 company, is a best-in-class, mission-driven life science REIT making a positive and lasting impact on the world. As the pioneer of the life science real estate niche since our founding in 1994, Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative life science, agtech, and advanced technology mega campuses in AAA innovation cluster locations, including Greater Boston, the San Francisco Bay Area, New York City, San Diego, Seattle, Maryland, and Research Triangle. Alexandria has a total market capitalization of $33.1 billion and an asset base in North America of 73.5 million SF as of December 31, 2023, which includes 42.0 million RSF of operating properties, 5.5 million RSF of Class A/A+ properties undergoing construction and one near-term project expected to commence construction in the next two years, 2.1 million RSF of priority anticipated development and redevelopment projects, and 23.9 million SF of future development projects. Alexandria has a longstanding and proven track record of developing Class A/A+ properties clustered in life science, agtech, and advanced technology mega campuses that provide our innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. Alexandria also provides strategic capital to transformative life science, agrifoodtech, climate innovation, and technology companies through our venture capital platform. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value.