Contrasting Host Hotels & Resorts (NASDAQ:HST) & Diversified Healthcare Trust (NASDAQ:DHC)

Host Hotels & Resorts (NASDAQ:HST) and Diversified Healthcare Trust (NASDAQ:DHC) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, profitability, dividends, analyst recommendations, earnings, institutional ownership and valuation.

Profitability

This table compares Host Hotels & Resorts and Diversified Healthcare Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Host Hotels & Resorts	16.40%	15.15%	7.75%
Diversified Healthcare Trust	-21.10%	-18.75%	-7.09%

Dividends

Host Hotels & Resorts pays an annual dividend of $0.80 per share and has a dividend yield of 3.2%. Diversified Healthcare Trust pays an annual dividend of $0.04 per share and has a dividend yield of 0.4%. Host Hotels & Resorts pays out 54.4% of its earnings in the form of a dividend. Diversified Healthcare Trust pays out -3.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Host Hotels & Resorts has raised its dividend for 2 consecutive years. Host Hotels & Resorts is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings and target prices for Host Hotels & Resorts and Diversified Healthcare Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Host Hotels & Resorts	0	6	10	1	2.71
Diversified Healthcare Trust	1	2	2	1	2.50

Host Hotels & Resorts presently has a consensus price target of $23.95, indicating a potential downside of 3.88%. Diversified Healthcare Trust has a consensus price target of $9.83, indicating a potential upside of 2.32%. Given Diversified Healthcare Trust’s higher probable upside, analysts plainly believe Diversified Healthcare Trust is more favorable than Host Hotels & Resorts.

Insider and Institutional Ownership

98.5% of Host Hotels & Resorts shares are owned by institutional investors. Comparatively, 76.0% of Diversified Healthcare Trust shares are owned by institutional investors. 1.5% of Host Hotels & Resorts shares are owned by company insiders. Comparatively, 10.2% of Diversified Healthcare 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.

Earnings and Valuation

This table compares Host Hotels & Resorts and Diversified Healthcare Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Host Hotels & Resorts	$6.17 billion	2.77	$765.00 million	$1.47	16.95
Diversified Healthcare Trust	$1.54 billion	1.51	-$285.89 million	($1.33)	-7.23

Host Hotels & Resorts has higher revenue and earnings than Diversified Healthcare Trust. Diversified Healthcare Trust is trading at a lower price-to-earnings ratio than Host Hotels & Resorts, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Host Hotels & Resorts has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500. Comparatively, Diversified Healthcare Trust has a beta of 2.32, indicating that its share price is 132% more volatile than the S&P 500.

Summary

Host Hotels & Resorts beats Diversified Healthcare Trust on 13 of the 17 factors compared between the two stocks.

About Host Hotels & Resorts

Host Hotels & Resorts, Inc. is a real estate investment trust, which engages in the management of luxury and upper-upscale hotels. It operates through the following geographical segments: United States, Brazil, and Canada. The company was founded in 1927 and is headquartered in Bethesda, MD.

About Diversified Healthcare Trust

Diversified Healthcare Trust is a real estate investment trust, which engages in the ownership of senior living communities, medical office buildings, and wellness centers. It operates through the following segments: Office Portfolio, Senior Housing Operating Portfolio (SHOP), and Non-Segment. The Office Portfolio segment consists of medical office properties leased to medical providers and other medical related businesses, as well as life science properties leased to biotech laboratories and other similar tenants. The SHOP segment manages senior living communities that offers short term and long term residential care, and other services for residents where it pay fees to the operator to manage the communities for its account. The company was founded on December 16, 1998 and is headquartered in Newton, MA.