Contrasting National Health Investors (NYSE:NHI) & Welltower (NYSE:WELL)

National Health Investors (NYSE:NHI) and Welltower (NYSE:WELL) are both real estate companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitability.

Valuation & Earnings

This table compares National Health Investors and Welltower”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Health Investors	$375.63 million	9.53	$142.18 million	$3.46	21.07
Welltower	$10.84 billion	15.66	$936.84 million	$2.18	108.05

Welltower has higher revenue and earnings than National Health Investors. National Health Investors is trading at a lower price-to-earnings ratio than Welltower, indicating that it is currently the more affordable of the two stocks.

Dividends

National Health Investors pays an annual dividend of $3.68 per share and has a dividend yield of 5.0%. Welltower pays an annual dividend of $3.40 per share and has a dividend yield of 1.4%. National Health Investors pays out 106.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Welltower pays out 156.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Welltower has increased its dividend for 2 consecutive years. National Health Investors is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares National Health Investors and Welltower’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National Health Investors	38.56%	10.89%	5.88%
Welltower	12.15%	3.56%	2.35%

Insider & Institutional Ownership

62.5% of National Health Investors shares are owned by institutional investors. Comparatively, 94.8% of Welltower shares are owned by institutional investors. 2.7% of National Health Investors shares are owned by insiders. Comparatively, 0.4% of Welltower shares are owned 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.

Analyst Ratings

This is a summary of current ratings and recommmendations for National Health Investors and Welltower, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Health Investors	1	2	5	0	2.50
Welltower	0	3	14	0	2.82

National Health Investors currently has a consensus price target of $83.86, indicating a potential upside of 15.01%. Welltower has a consensus price target of $246.11, indicating a potential upside of 4.48%. Given National Health Investors’ higher possible upside, research analysts plainly believe National Health Investors is more favorable than Welltower.

Risk and Volatility

National Health Investors has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500. Comparatively, Welltower has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500.

Summary

Welltower beats National Health Investors on 9 of the 17 factors compared between the two stocks.

About National Health Investors

Incorporated in 1991, National Health Investors, Inc. (NYSE:NHI) is a real estate investment trust specializing in sale, leasebacks, joint-ventures, senior housing operating partnerships, and mortgage and mezzanine financing of need-driven and discretionary senior housing and medical investments. NHI's portfolio consists of independent living, assisted living and memory care communities, entrance-fee retirement communities, skilled nursing facilities, and specialty hospitals.

About Welltower

Welltower Inc. (NYSE:WELL), a real estate investment trust (“REIT”) and S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. Welltower invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience. Welltower owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties.