Community Healthcare Trust (NYSE: CHCT) and Omega Healthcare Investors (NYSE:OHI) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, dividends, analyst recommendations, earnings and profitability.

Insider and Institutional Ownership

59.3% of Community Healthcare Trust shares are held by institutional investors. Comparatively, 73.6% of Omega Healthcare Investors shares are held by institutional investors. 5.5% of Community Healthcare Trust shares are held by company insiders. Comparatively, 4.5% of Omega Healthcare Investors shares are held 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.

Valuation & Earnings

This table compares Community Healthcare Trust and Omega Healthcare Investors’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Community Healthcare Trust $30.77 million 10.34 $20.43 million $0.27 92.89
Omega Healthcare Investors $926.66 million 6.45 $853.15 million $1.89 16.03

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Community Healthcare Trust and Omega Healthcare Investors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Community Healthcare Trust 0 0 1 0 3.00
Omega Healthcare Investors 0 4 0 0 2.00

Community Healthcare Trust currently has a consensus target price of $26.50, indicating a potential upside of 5.66%. Omega Healthcare Investors has a consensus target price of $33.00, indicating a potential upside of 8.95%. Given Omega Healthcare Investors’ higher possible upside, analysts clearly believe Omega Healthcare Investors is more favorable than Community Healthcare Trust.

Volatility and Risk

Community Healthcare Trust has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500. Comparatively, Omega Healthcare Investors has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500.

Dividends

Community Healthcare Trust pays an annual dividend of $1.56 per share and has a dividend yield of 6.2%. Omega Healthcare Investors pays an annual dividend of $2.56 per share and has a dividend yield of 8.5%. Community Healthcare Trust pays out 577.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Omega Healthcare Investors pays out 135.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Omega Healthcare Investors has increased its dividend for 7 consecutive years. Omega Healthcare Investors is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Community Healthcare Trust and Omega Healthcare Investors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Community Healthcare Trust 11.30% 1.81% 1.33%
Omega Healthcare Investors 40.20% 8.88% 4.17%

Summary

Omega Healthcare Investors beats Community Healthcare Trust on 11 of the 17 factors compared between the two stocks.

Community Healthcare Trust Company Profile

Community Healthcare Trust Incorporated is an integrated healthcare real estate company. The Company owns and acquires, or finances, real estate properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers in non-urban markets. It has investments in healthcare real estate, including mortgage and other loans. The Company’s medical office buildings are located in areas, such as, Florida, Georgia, Illinois, Kentucky, Ohio and Texas. Its physician clinics are located in Alabama, Florida, Kansas, Pennsylvania and Wisconsin. Its surgical centers and hospitals are located in areas, such as Louisiana, Michigan and Arizona. Its behavioral facilities are located in Indiana and Illinois. Its specialty centers are located in Texas, Colorado and Alabama, among others. As of December 31, 2016, the Company had interests in 57 real estate properties and one mortgage note, located in 22 states, totaling over 1.33 million square feet in the aggregate.

Omega Healthcare Investors Company Profile

Omega Healthcare Investors, Inc. is a self-administered real estate investment trust (REIT). The Company maintains a portfolio of long-term healthcare facilities and mortgages on healthcare facilities located in the United States and the United Kingdom. It operates through the segment, which consists of investments in healthcare-related real estate properties. It provides lease or mortgage financing to qualified operators of skilled nursing facilities (SNFs) and assisted living facilities (ALFs), independent living facilities, rehabilitation and acute care facilities. Its portfolio consists of long-term leases and mortgage agreements. As of December 31, 2016, its portfolio of investments included 996 healthcare facilities located in 42 states and the United Kingdom and operated by 79 third-party operators. As of December 31, 2016, the Company’s portfolio consisted of 809 SNFs, 101 ALFs, 16 specialty facilities, one medical office building, fixed rate mortgages on 44 SNFs and two ALFs.

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