Omega Healthcare Investors (NYSE: OHI) and National Health Investors (NYSE:NHI) are both mid-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, dividends, risk, profitability and institutional ownership.
Earnings & Valuation
This table compares Omega Healthcare Investors and National Health Investors’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Omega Healthcare Investors||$926.66 million||6.65||$853.50 million||$1.89||16.53|
|National Health Investors||$263.75 million||11.99||$257.02 million||$3.89||19.84|
Omega Healthcare Investors has higher revenue and earnings than National Health Investors. Omega Healthcare Investors is trading at a lower price-to-earnings ratio than National Health Investors, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
72.8% of Omega Healthcare Investors shares are owned by institutional investors. Comparatively, 70.7% of National Health Investors shares are owned by institutional investors. 1.5% of Omega Healthcare Investors shares are owned by insiders. Comparatively, 5.2% of National Health Investors shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This is a summary of recent recommendations for Omega Healthcare Investors and National Health Investors, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Omega Healthcare Investors||0||2||0||0||2.00|
|National Health Investors||1||4||1||0||2.00|
Omega Healthcare Investors currently has a consensus price target of $31.50, suggesting a potential upside of 0.80%. National Health Investors has a consensus price target of $78.75, suggesting a potential upside of 2.05%. Given National Health Investors’ higher probable upside, analysts plainly believe National Health Investors is more favorable than Omega Healthcare Investors.
Volatility and Risk
Omega Healthcare Investors has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500. Comparatively, National Health Investors has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.
Omega Healthcare Investors pays an annual dividend of $2.56 per share and has a dividend yield of 8.2%. National Health Investors pays an annual dividend of $3.80 per share and has a dividend yield of 4.9%. Omega Healthcare Investors pays out 135.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. National Health Investors pays out 97.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Omega Healthcare Investors has raised its dividend for 7 consecutive years and National Health Investors has raised its dividend for 7 consecutive years.
This table compares Omega Healthcare Investors and National Health Investors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Omega Healthcare Investors||40.20%||8.88%||4.17%|
|National Health Investors||59.24%||12.56%||6.38%|
National Health Investors beats Omega Healthcare Investors on 11 of the 15 factors compared between the two stocks.
About Omega Healthcare Investors
Omega Healthcare Investors, Inc. is a self-administered real estate investment trust (REIT). The Company maintains a portfolio of long-term healthcare facilities and mortgages on healthcare facilities located in the United States and the United Kingdom. It operates through the segment, which consists of investments in healthcare-related real estate properties. It provides lease or mortgage financing to qualified operators of skilled nursing facilities (SNFs) and assisted living facilities (ALFs), independent living facilities, rehabilitation and acute care facilities. Its portfolio consists of long-term leases and mortgage agreements. As of December 31, 2016, its portfolio of investments included 996 healthcare facilities located in 42 states and the United Kingdom and operated by 79 third-party operators. As of December 31, 2016, the Company’s portfolio consisted of 809 SNFs, 101 ALFs, 16 specialty facilities, one medical office building, fixed rate mortgages on 44 SNFs and two ALFs.
About National Health Investors
National Health Investors, Inc. is a self-managed real estate investment trust (REIT) specializing in sale-leaseback, joint-venture, mortgage and mezzanine financing of need-driven and discretionary senior housing and medical investments. The Company is engaged in the business of owning and financing healthcare properties. Its portfolio consists of lease, mortgage and other note investments in independent living facilities, assisted living facilities, entrance-fee communities, senior living campuses, skilled nursing facilities, specialty hospitals and medical office buildings. Its other investments include marketable securities and a joint venture structured to comply with the provisions of the REIT Investment Diversification Empowerment Act of 2007 (RIDEA) through which it invests in facility operations managed by an independent third party. As of December 31, 2016, it had investments in real estate, mortgage and other notes receivable involving 205 facilities located in 32 states.
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