Critical Comparison: Welltower (NYSE:WELL) & National Healthcare Properties (NASDAQ:NHP)

National Healthcare Properties (NASDAQ:NHP) and Welltower (NYSE:WELL) are both real estate companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, profitability, risk and earnings.

Dividends

National Healthcare Properties pays an annual dividend of $0.30 per share and has a dividend yield of 2.0%. Welltower pays an annual dividend of $3.40 per share and has a dividend yield of 1.5%. National Healthcare Properties pays out -230.8% of its earnings in the form of a dividend. 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 raised its dividend for 2 consecutive years. National Healthcare Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

94.8% of Welltower shares are owned by institutional investors. 0.4% of Welltower shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
National Healthcare Properties	-13.04%	-6.22%	-2.52%
Welltower	12.15%	3.56%	2.35%

Valuation and Earnings

This table compares National Healthcare Properties and Welltower”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Healthcare Properties	$342.28 million	3.24	-$57.62 million	($0.13)	-116.85
Welltower	$12.59 billion	12.78	$936.84 million	$2.18	102.39

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

Analyst Recommendations

This is a summary of current recommendations for National Healthcare Properties and Welltower, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Healthcare Properties	1	5	6	0	2.42
Welltower	0	4	14	2	2.90

National Healthcare Properties presently has a consensus price target of $18.22, indicating a potential upside of 19.96%. Welltower has a consensus price target of $255.91, indicating a potential upside of 14.64%. Given National Healthcare Properties’ higher possible upside, equities research analysts clearly believe National Healthcare Properties is more favorable than Welltower.

Summary

Welltower beats National Healthcare Properties on 14 of the 17 factors compared between the two stocks.

About National Healthcare Properties

National Healthcare Properties Inc. is a self-managed real estate investment trust focused on acquiring, owning and investing in a diversified portfolio of healthcare real estate, with an emphasis on providing senior housing. National Healthcare Properties Inc. is based in NEW YORK.

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.