Critical Survey: CareTrust REIT (NYSE:CTRE) and American Healthcare REIT (NYSE:AHR)

CareTrust REIT (NYSE:CTRE) and American Healthcare REIT (NYSE:AHR) are both real estate companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.

Valuation & Earnings

This table compares CareTrust REIT and American Healthcare REIT”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CareTrust REIT	$476.39 million	19.25	$320.54 million	$1.59	24.41
American Healthcare REIT	$2.26 billion	4.63	$69.81 million	$0.68	79.86

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

Insider and Institutional Ownership

87.8% of CareTrust REIT shares are owned by institutional investors. Comparatively, 16.7% of American Healthcare REIT shares are owned by institutional investors. 0.7% of CareTrust REIT shares are owned by insiders. Comparatively, 0.7% of American Healthcare REIT shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

CareTrust REIT pays an annual dividend of $1.56 per share and has a dividend yield of 4.0%. American Healthcare REIT pays an annual dividend of $1.00 per share and has a dividend yield of 1.8%. CareTrust REIT pays out 98.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Healthcare REIT pays out 147.1% 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 3 consecutive years. CareTrust REIT is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares CareTrust REIT and American Healthcare REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CareTrust REIT	62.19%	8.52%	6.64%
American Healthcare REIT	4.84%	3.63%	2.25%

Analyst Recommendations

This is a summary of recent ratings for CareTrust REIT and American Healthcare REIT, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CareTrust REIT	0	3	8	2	2.92
American Healthcare REIT	0	2	12	0	2.86

CareTrust REIT presently has a consensus target price of $44.82, suggesting a potential upside of 15.48%. American Healthcare REIT has a consensus target price of $60.42, suggesting a potential upside of 11.26%. Given CareTrust REIT’s stronger consensus rating and higher probable upside, equities analysts clearly believe CareTrust REIT is more favorable than American Healthcare REIT.

Risk and Volatility

CareTrust REIT has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500. Comparatively, American Healthcare REIT has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500.

Summary

CareTrust REIT beats American Healthcare REIT on 13 of the 18 factors compared between the two stocks.

About CareTrust REIT

CareTrust REIT, Inc. is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. With a nationwide portfolio of long-term net-leased properties, and a growing portfolio of quality operators leasing them, CareTrust REIT is pursuing both external and organic growth opportunities across the United States.

About American Healthcare REIT

Formed by the successful merger of Griffin-American Healthcare REIT III and Griffin-American Healthcare REIT IV, as well as the acquisition of the business and operations of American Healthcare Investors, American Healthcare REIT is one of the larger healthcare-focused real estate investment trusts globally with assets totaling approximately $4.2 billion in gross investment value. The company benefits from a fully integrated management platform comprised of more than one hundred experienced and skilled professionals, many of whom have worked together since 2006 and have successfully invested in and managed healthcare real estate through multiple market cycles. The management team has a proven track record, deep industry relationships and unparalleled insight into each of the company's assets having built and nurtured the company's international portfolio since its original property acquisition in 2014. The strength of the management team, coupled with the quality of the assets, has American Healthcare REIT poised to capitalize on compelling growth driven by powerful demographic trends. With its 19 million-square-foot, 312-building portfolio of medical office buildings, senior housing communities, skilled nursing facilities and integrated senior health campuses diversified across 36 states and the United Kingdom, the tri-party transaction was a critical step in ideally positioning American Healthcare REIT for a future public listing or IPO on a national stock exchange at the most opportune time. By listing the company's shares on a national exchange, we believe the company will gain greater access to attractive capital that will fuel future growth, broaden our investor base and also provide liquidity to our fellow stockholders. American Healthcare REIT, Inc. operates as a subsidiary of Griffin Capital Company, LLC.