Head-To-Head Comparison: Community Healthcare Trust (NYSE:CHCT) and NNN REIT (NYSE:NNN)

NNN REIT (NYSE:NNN) and Community Healthcare Trust (NYSE:CHCT) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Dividends

NNN REIT pays an annual dividend of $2.40 per share and has a dividend yield of 5.7%. Community Healthcare Trust pays an annual dividend of $1.90 per share and has a dividend yield of 11.1%. NNN REIT pays out 115.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Community Healthcare Trust pays out -475.0% of its earnings in the form of a dividend. NNN REIT has raised its dividend for 35 consecutive years and Community Healthcare Trust has raised its dividend for 3 consecutive years. Community Healthcare Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current ratings for NNN REIT and Community Healthcare Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NNN REIT	1	6	0	0	1.86
Community Healthcare Trust	1	1	2	0	2.25

NNN REIT presently has a consensus price target of $43.17, indicating a potential upside of 2.30%. Community Healthcare Trust has a consensus price target of $18.00, indicating a potential upside of 5.36%. Given Community Healthcare Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Community Healthcare Trust is more favorable than NNN REIT.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NNN REIT	43.22%	8.95%	4.29%
Community Healthcare Trust	-6.27%	-1.66%	-0.76%

Volatility and Risk

NNN REIT has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500. Comparatively, Community Healthcare Trust has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500.

Valuation & Earnings

This table compares NNN REIT and Community Healthcare Trust”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NNN REIT	$869.27 million	9.22	$396.83 million	$2.08	20.29
Community Healthcare Trust	$115.79 million	4.20	-$3.18 million	($0.40)	-42.71

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

Insider and Institutional Ownership

90.0% of NNN REIT shares are owned by institutional investors. Comparatively, 87.8% of Community Healthcare Trust shares are owned by institutional investors. 0.8% of NNN REIT shares are owned by company insiders. Comparatively, 5.1% of Community Healthcare Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

NNN REIT beats Community Healthcare Trust on 11 of the 17 factors compared between the two stocks.

About NNN REIT

NNN REIT invests primarily in high-quality retail properties subject generally to long-term, net leases. As of December 31, 2023, the company owned 3,532 properties in 49 states with a gross leasable area of approximately 36.0 million square feet and a weighted average remaining lease term of 10.1 years. NNN is one of only three publicly traded REITs to have increased annual dividends for 34 or more consecutive years.

About Community Healthcare Trust

Community Healthcare Trust Incorporated (the Company”, we”, our”) was organized in the State of Maryland on March 28, 2014. The Company is a fully-integrated healthcare real estate company that owns and acquires real estate properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers. As of March 31, 2024, the Company had investments of approximately $1.1 billion in 197 real estate properties (including a portion of one property accounted for as a sales-type lease with a gross amount totaling approximately $3.0 million and two properties classified as an asset held for sale with an aggregate amount totaling approximately $7.5 million. The properties are located in 35 states, totaling approximately 4.4 million square feet in the aggregate and were approximately 92.3% leased, excluding real estate assets held for sale, at March 31, 2024 with a weighted average remaining lease term of approximately 6.9 years.