CareTrust REIT (NASDAQ: CTRE) and Universal Health Realty Income Trust (NYSE:UHT) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, profitability, valuation, risk, institutional ownership and earnings.
This table compares CareTrust REIT and Universal Health Realty Income Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Universal Health Realty Income Trust||61.38%||8.12%||3.32%|
This table compares CareTrust REIT and Universal Health Realty Income Trust’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|CareTrust REIT||$104.68 million||13.56||$29.35 million||$0.47||39.79|
|Universal Health Realty Income Trust||$67.08 million||15.26||$17.21 million||$3.24||23.01|
CareTrust REIT has higher revenue and earnings than Universal Health Realty Income Trust. Universal Health Realty Income 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.
This is a summary of recent recommendations and price targets for CareTrust REIT and Universal Health Realty Income Trust, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Universal Health Realty Income Trust||0||0||0||0||N/A|
CareTrust REIT presently has a consensus price target of $19.14, indicating a potential upside of 2.37%. Given CareTrust REIT’s higher probable upside, analysts clearly believe CareTrust REIT is more favorable than Universal Health Realty Income Trust.
Risk & Volatility
CareTrust REIT has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500. Comparatively, Universal Health Realty Income Trust has a beta of 0.35, suggesting that its stock price is 65% less volatile than the S&P 500.
CareTrust REIT pays an annual dividend of $0.74 per share and has a dividend yield of 4.0%. Universal Health Realty Income Trust pays an annual dividend of $2.64 per share and has a dividend yield of 3.5%. CareTrust REIT pays out 157.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Universal Health Realty Income Trust pays out 81.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CareTrust REIT has raised its dividend for 31 consecutive years. CareTrust REIT is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
88.2% of CareTrust REIT shares are held by institutional investors. Comparatively, 58.8% of Universal Health Realty Income Trust shares are held by institutional investors. 1.6% of CareTrust REIT shares are held by insiders. Comparatively, 1.9% of Universal Health Realty Income Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
About CareTrust REIT
CareTrust REIT, Inc. is a self-administered, self-managed real estate investment trust. The Company is engaged in the ownership, acquisition and leasing of healthcare-related properties. It makes investments in healthcare-related real estate assets. As of December 31, 2016, its real estate portfolio included 154 skilled nursing facilities (SNFs), SNF Campuses, assisted living facilities and independent living facilities. As of December 31, 2016, the 93 facilities leased to The Ensign Group, Inc. had a total of 9,916 beds and units and are located in Arizona, California, Colorado, Idaho, Iowa, Nebraska, Nevada, Texas, Utah and Washington; the 16 facilities leased to affiliates of Pristine Senior Living, LLC had a total of 1,488 beds and units; and the 42 remaining leased properties had a total of 3,515 beds and units and are located in California, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Maryland, Michigan, Minnesota, North Carolina, Texas, Virginia, Washington and Wisconsin.
About Universal Health Realty Income Trust
Universal Health Realty Income Trust is a real estate investment trust (REIT). The Company invests in healthcare and human service related facilities, including acute care hospitals, rehabilitation hospitals, sub-acute facilities, surgery centers, free-standing emergency departments, childcare centers and medical office buildings (MOBs). As of February 28, 2017, the Company had 67 real estate investments located in 20 states in the United States consisting of six hospital facilities, including three acute care, one rehabilitation and two sub-acute; 54 MOBs; three free-standing emergency departments (FEDs), and four preschool and childcare centers. The Company’s facilities include Southwest Healthcare System, Inland Valley Campus, Wellington Regional Medical Center, Kindred Hospital Chicago Central, Vibra Hospital of Corpus Christi, Chesterbrook Academy, and Desert Valley Medical Center.
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