Analyzing Community Healthcare Trust (NYSE:CHCT) and Medical Properties Trust (NYSE:MPT)

Community Healthcare Trust (NYSE:CHCT) and Medical Properties Trust (NYSE:MPT) are both small-cap real estate companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, valuation, earnings, risk and dividends.

Institutional & Insider Ownership

87.8% of Community Healthcare Trust shares are owned by institutional investors. Comparatively, 71.8% of Medical Properties Trust shares are owned by institutional investors. 5.3% of Community Healthcare Trust shares are owned by company insiders. Comparatively, 1.8% of Medical Properties Trust shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Community Healthcare Trust and Medical Properties Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Community Healthcare Trust	17.76%	5.34%	2.24%
Medical Properties Trust	24.14%	5.45%	1.69%

Earnings and Valuation

This table compares Community Healthcare Trust and Medical Properties Trust”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Community Healthcare Trust	$121.19 million	3.49	$5.10 million	$0.73	20.15
Medical Properties Trust	$1.03 billion	0.96	-$277.05 million	$0.41	4.09

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

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Community Healthcare Trust	1	2	2	0	2.20
Medical Properties Trust	3	1	0	0	1.25

Community Healthcare Trust currently has a consensus price target of $17.50, indicating a potential upside of 18.95%. Medical Properties Trust has a consensus price target of $2.68, indicating a potential upside of 60.20%. Given Medical Properties Trust’s higher possible upside, analysts clearly believe Medical Properties Trust is more favorable than Community Healthcare Trust.

Risk and Volatility

Community Healthcare Trust has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500. Comparatively, Medical Properties Trust has a beta of 1.5, indicating that its share price is 50% more volatile than the S&P 500.

Dividends

Community Healthcare Trust pays an annual dividend of $1.32 per share and has a dividend yield of 9.0%. Medical Properties Trust pays an annual dividend of $0.36 per share and has a dividend yield of 21.5%. Community Healthcare Trust pays out 180.8% 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 87.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Community Healthcare Trust 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.

Summary

Community Healthcare Trust beats Medical Properties Trust on 10 of the 17 factors compared between the two stocks.

About Community Healthcare Trust

Community Healthcare Trust is a real estate investment trust that acquires, owns and leases properties used to provide healthcare services. Its portfolio includes medical office buildings and other outpatient facilities occupied by healthcare providers. The company’s properties support a range of services, including physician practices, ambulatory care and other medical specialties. Community Healthcare Trust focuses on markets across the United States, including smaller and non-urban communities.

About Medical Properties Trust

Medical Properties Trust is a real estate investment trust that owns and invests in healthcare facilities, with a primary focus on hospitals. The company leases its properties to healthcare operators and may provide financing related to the acquisition or development of medical facilities. Founded in 2003, Medical Properties Trust has built a portfolio of properties serving acute-care, behavioral health, rehabilitation and other healthcare needs. Its investments have included facilities in the United States and international markets.