Analyzing LTC Properties (NYSE:LTC) & Diversified Healthcare Trust (NASDAQ:DHC)

LTC Properties (NYSE:LTC) and Diversified Healthcare Trust (NASDAQ:DHC) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, profitability, analyst recommendations, earnings, dividends and risk.

Dividends

LTC Properties pays an annual dividend of $2.28 per share and has a dividend yield of 5.9%. Diversified Healthcare Trust pays an annual dividend of $0.04 per share and has a dividend yield of 0.6%. LTC Properties pays out 93.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Diversified Healthcare Trust pays out -3.4% of its earnings in the form of a dividend.

Institutional and Insider Ownership

69.3% of LTC Properties shares are owned by institutional investors. Comparatively, 76.0% of Diversified Healthcare Trust shares are owned by institutional investors. 2.1% of LTC Properties shares are owned by insiders. Comparatively, 1.4% of Diversified Healthcare Trust 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.

Profitability

This table compares LTC Properties and Diversified Healthcare Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LTC Properties	44.82%	10.95%	6.14%
Diversified Healthcare Trust	-18.59%	-15.98%	-6.08%

Volatility & Risk

LTC Properties has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500. Comparatively, Diversified Healthcare Trust has a beta of 2.35, meaning that its stock price is 135% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for LTC Properties and Diversified Healthcare Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LTC Properties	0	4	2	1	2.57
Diversified Healthcare Trust	1	2	1	0	2.00

LTC Properties presently has a consensus target price of $39.60, indicating a potential upside of 2.22%. Diversified Healthcare Trust has a consensus target price of $7.25, indicating a potential upside of 4.47%. Given Diversified Healthcare Trust’s higher probable upside, analysts plainly believe Diversified Healthcare Trust is more favorable than LTC Properties.

Earnings and Valuation

This table compares LTC Properties and Diversified Healthcare Trust”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LTC Properties	$262.85 million	7.15	$117.97 million	$2.44	15.88
Diversified Healthcare Trust	$1.54 billion	1.09	-$285.89 million	($1.19)	-5.83

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

Summary

LTC Properties beats Diversified Healthcare Trust on 12 of the 17 factors compared between the two stocks.

About LTC Properties

LTC Properties, Inc. is a real estate investment trust, which engages in managing seniors housing and health care properties. It operates through the Texas, Michigan, Florida, Wisconsin, Colorado, and Remaining States geographic segments. The company was founded by Andre C. Dimitriadis on May 12, 1992 and is headquartered in Westlake Village, CA.

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.