Analyzing CareTrust REIT (NYSE:CTRE) and Medical Properties Trust (NYSE:MPT)

Medical Properties Trust (NYSE:MPT) and CareTrust REIT (NYSE:CTRE) are both mid-cap real estate companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, dividends, valuation and analyst recommendations.

Earnings & Valuation

This table compares Medical Properties Trust 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
Medical Properties Trust	$972.02 million	2.47	-$277.05 million	($0.06)	-67.00
CareTrust REIT	$476.39 million	19.37	$320.54 million	$1.59	24.57

CareTrust REIT has lower revenue, but higher earnings than Medical Properties Trust. Medical Properties 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.

Insider and Institutional Ownership

71.8% of Medical Properties Trust shares are owned by institutional investors. Comparatively, 87.8% of CareTrust REIT shares are owned by institutional investors. 1.8% of Medical Properties Trust shares are owned by company insiders. Comparatively, 0.7% of CareTrust REIT shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

Medical Properties Trust has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500. Comparatively, CareTrust REIT has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500.

Profitability

This table compares Medical Properties Trust and CareTrust REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Medical Properties Trust	-2.96%	-0.66%	-0.20%
CareTrust REIT	62.19%	8.52%	6.64%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Medical Properties Trust and CareTrust REIT, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Medical Properties Trust	2	1	0	0	1.33
CareTrust REIT	0	3	9	1	2.85

Medical Properties Trust currently has a consensus price target of $4.15, indicating a potential upside of 3.23%. CareTrust REIT has a consensus price target of $44.55, indicating a potential upside of 14.04%. Given CareTrust REIT’s stronger consensus rating and higher possible upside, analysts clearly believe CareTrust REIT is more favorable than Medical Properties Trust.

Dividends

Medical Properties Trust pays an annual dividend of $0.36 per share and has a dividend yield of 9.0%. CareTrust REIT pays an annual dividend of $1.56 per share and has a dividend yield of 4.0%. Medical Properties Trust pays out -600.0% of its earnings in the form of a dividend. 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. CareTrust REIT has increased its dividend for 3 consecutive years. Medical Properties Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

CareTrust REIT beats Medical Properties Trust on 13 of the 18 factors compared between the two stocks.

About Medical Properties Trust

Medical Properties Trust, Inc. is a self-advised real estate investment trust formed to capitalize on the changing trends in healthcare delivery by acquiring and developing net-leased healthcare facilities. MPT’s financing model allows hospitals and other healthcare facilities to unlock the value of their underlying real estate in order to fund facility improvements, technology upgrades, staff additions and new construction. Facilities include acute care hospitals, inpatient rehabilitation hospitals, long-term acute care hospitals, and other medical and surgical facilities.

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.