Critical Review: CareTrust REIT (NYSE:CTRE) vs. American Healthcare REIT (NYSE:AHR)

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

Dividends

American Healthcare REIT pays an annual dividend of $1.00 per share and has a dividend yield of 1.8%. CareTrust REIT pays an annual dividend of $1.56 per share and has a dividend yield of 3.8%. American Healthcare REIT pays out 172.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CareTrust REIT pays out 100.0% 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.

Analyst Recommendations

This is a summary of current recommendations for American Healthcare REIT and CareTrust REIT, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Healthcare REIT	0	2	12	0	2.86
CareTrust REIT	0	2	10	1	2.92

American Healthcare REIT presently has a consensus price target of $58.83, indicating a potential upside of 6.71%. CareTrust REIT has a consensus price target of $44.82, indicating a potential upside of 8.66%. Given CareTrust REIT’s stronger consensus rating and higher possible upside, analysts plainly believe CareTrust REIT is more favorable than American Healthcare REIT.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
American Healthcare REIT	4.23%	3.33%	1.98%
CareTrust REIT	64.10%	8.65%	6.66%

Volatility & Risk

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

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Healthcare REIT	$2.26 billion	4.70	$69.81 million	$0.58	95.06
CareTrust REIT	$476.39 million	20.45	$320.54 million	$1.56	26.44

CareTrust REIT has lower revenue, but higher earnings 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.

Institutional and Insider Ownership

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

Summary

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

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.

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.