Community Healthcare Trust (NYSE: CHCT) and Medical Properties Trust (NYSE:MPW) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, earnings, analyst recommendations, risk and profitability.
This table compares Community Healthcare Trust and Medical Properties Trust’s 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%|
|Medical Properties Trust||42.25%||7.54%||3.83%|
Institutional & Insider Ownership
59.0% of Community Healthcare Trust shares are held by institutional investors. Comparatively, 82.1% of Medical Properties Trust shares are held by institutional investors. 5.5% of Community Healthcare Trust shares are held by company insiders. Comparatively, 1.0% of Medical Properties Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Risk & Volatility
Community Healthcare Trust has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500. Comparatively, Medical Properties Trust has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for Community Healthcare Trust and Medical Properties Trust, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Community Healthcare Trust||0||0||1||0||3.00|
|Medical Properties Trust||2||4||6||0||2.33|
Community Healthcare Trust presently has a consensus target price of $26.50, suggesting a potential upside of 4.74%. Medical Properties Trust has a consensus target price of $14.11, suggesting a potential upside of 11.37%. Given Medical Properties Trust’s higher probable upside, analysts plainly believe Medical Properties Trust is more favorable than Community Healthcare Trust.
Community Healthcare Trust pays an annual dividend of $1.56 per share and has a dividend yield of 6.2%. Medical Properties Trust pays an annual dividend of $0.96 per share and has a dividend yield of 7.6%. 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. Medical Properties Trust pays out 115.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Medical Properties Trust has increased its dividend for 3 consecutive years. Medical Properties Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares Community Healthcare Trust and Medical Properties Trust’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Community Healthcare Trust||$30.77 million||10.43||$20.43 million||$0.27||93.71|
|Medical Properties Trust||$601.93 million||7.66||$492.57 million||$0.83||15.27|
Medical Properties Trust has higher revenue and earnings than Community Healthcare Trust. Medical Properties Trust 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.
Medical Properties Trust beats Community Healthcare Trust on 12 of the 17 factors compared between the two stocks.
About Community Healthcare Trust
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.
About Medical Properties Trust
Medical Properties Trust, Inc. is a real estate investment trust (REIT). The Company focuses on investing in and owning net-leased healthcare facilities across the United States and selectively in foreign jurisdictions. The Company’s segment is its investments in healthcare real estate, including mortgage and other loans, as well as any equity investments in its tenants. The Company conducts its operations through MPT Operating Partnership, L.P. The Company acquires and develops healthcare facilities, and leases the facilities to healthcare operating companies under long-term net leases. The Company makes mortgage loans to healthcare operators collateralized by their real estate assets. As of February 24, 2017, the Company’s portfolio consisted of 232 properties, including 215 facilities (of the 220 facilities that it owns) were leased to 30 tenants, five were under development, and the remaining assets were in the form of mortgage loans to four operators.
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