Analyzing CareTrust REIT (NYSE:CTRE) & Medical Properties Trust (NYSE:MPT)

CareTrust REIT (NYSE:CTRE) and Medical Properties Trust (NYSE:MPT) are both mid-cap real estate companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Valuation & Earnings

This table compares CareTrust REIT and Medical Properties Trust”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CareTrust REIT	$452.64 million	20.53	$320.54 million	$1.59	24.73
Medical Properties Trust	$972.02 million	2.46	-$277.05 million	($0.06)	-66.67

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

Dividends

CareTrust REIT pays an annual dividend of $1.56 per share and has a dividend yield of 4.0%. Medical Properties Trust pays an annual dividend of $0.36 per share and has a dividend yield of 9.0%. 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. Medical Properties Trust pays out -600.0% of its earnings in the form of a dividend. CareTrust REIT has increased its dividend for 3 consecutive years. Medical Properties Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares CareTrust REIT and Medical Properties Trust’s 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%
Medical Properties Trust	-2.96%	-0.66%	-0.20%

Insider and Institutional Ownership

87.8% of CareTrust REIT shares are held by institutional investors. Comparatively, 71.8% of Medical Properties Trust shares are held by institutional investors. 0.7% of CareTrust REIT shares are held by company insiders. Comparatively, 1.8% of Medical Properties Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for CareTrust REIT and Medical Properties Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CareTrust REIT	0	3	9	1	2.85
Medical Properties Trust	2	1	0	0	1.33

CareTrust REIT currently has a consensus price target of $44.55, indicating a potential upside of 13.28%. Medical Properties Trust has a consensus price target of $4.15, indicating a potential upside of 3.75%. Given CareTrust REIT’s stronger consensus rating and higher possible upside, equities analysts clearly believe CareTrust REIT is more favorable than Medical Properties Trust.

Volatility & Risk

CareTrust REIT has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, Medical Properties Trust has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.

Summary

CareTrust REIT beats Medical Properties Trust on 13 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 Medical Properties Trust

Medical Properties Trust, Inc. is a self-advised real estate investment trust formed to capitalize on the changing trends in healthcare delivery by acquiring and developing net-leased healthcare facilities. MPT’s financing model allows hospitals and other healthcare facilities to unlock the value of their underlying real estate in order to fund facility improvements, technology upgrades, staff additions and new construction. Facilities include acute care hospitals, inpatient rehabilitation hospitals, long-term acute care hospitals, and other medical and surgical facilities.